I Bit The Bullit Trading Iron Condors
I had a fascinating conversation today with an option trader who is still seeking that magic secret to making consistent returns with option trading. He said many things that made a lot of sense.
Something that stood out was when he said "Non-directional option trading doesn't mean we can make money in any direction. It means that we make money if the underlying doesn't move in any direction. In other words, it's still a directional trade, sideways." I couldn't agree more, and it's been advertised that it's easy to make money with options because we can make money on any direction. In some respects this is true, but in others it's not.
If you're trading Iron Condors, you know what I am talking about; especially if you are trading the Condors that most courses and books teach. If you are trading this strategy in 2009, you probably aren't making anything. That's because the Iron Condor is just as directional as most option trades only that its direction is sideways. It's just as hard to predict a sideways move as it is up or down, for some.
I've heard many people's plights over the years about losing huge chunks of their accounts trading credit spreads and condors, and it's always the same situation... "It went really well for several months, and then I pretty much lost my whole account in one day." I've heard this so many times and frankly it's getting old.
This is exactly why I don't teach traditional Condors and Credit Spreads. If you are a few days from expiration, and the RUT is right at your short strike, then you are doing it the way most people trade this strategy, and soon you'll be facing the shame of explaining yourself to the spouse! Go ahead, laugh, but it won't seem so funny when it happens to you and your life is in tatters because of this mess of stress you made yourself.
In response to this problem San Jose Options Mentoring has reinvented Iron Condors and Credit Spreads. The less you have to adjust your condor, the better off you will be in most cases and we have a different technique which gives the underlying much more flexibility, lowering our stress level and keeping us out away from a disastrous scenario.
So you know we have a safer way to trade Condors, but we've also developed great techniques to lock-in our profits on them. Normally option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.
When you get right to it, if we ever have a Condor move against us, then we have developed a backup plan which gives us a free bonus trade! So, even though we may experience an undesirable month, we still get an excellent, free trade while most traders just take the fall and crawl away.
In the end, win or lose, we have developed an impressive way to trade Iron Condors along with other strategies.
Article Source: FxTradingStock.com
About the Author
Are you interested in preserving your savings while still maintaining a high probability of making money with Option Trading? Then visit the San Jose Options Mentoring Course for more information.
by: Johnny M Junior
Total views: 52
Word Count: 519
Date: Thu, 27 May 2010
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