I HAD to post this. Read on and you will see why...
Author: Ted Nino
The Iron Condor is perhaps the most dangerous option strategy around.
The thing is, when rookie option traders first hear of this strategy (perhaps from a late night infomercial or free hotel seminar conducted by slick salesmen touting it as the greatest thing since sliced bread) - very few seem to able to resist the temptation to jump right into trading them head first - with actual real hard earned money on the line - and usually way too much of it.
And it seems that a good percentage of them - if not most of them - promptly wind up getting their groins kicked in, their heads ripped off, their eyes poked out, and getting hurt really, really bad.
Now wait -
Before you start to get the wrong impression, please, let me clarify something here.
I absolutely LOVE iron condors. ALOT. In fact, the iron condor is right up there as one of my favorite trading strategies.
I think the iron condor really IS a great trade.
And yes, I absolutely believe all those stories and claims you hear swirling around about iron condors generating ten percent plus monthly returns and providing trades that have the probability of winning somewhere in the range of eighty to ninety percent. In fact, I KNOW those stories are true because I see it happen all the time in my very own trading account.
The problem is - there is something big that is being left out of all those claims and stories - and this something is causing way too many fresh new doe eyed option traders to misunderstand this strategy right from the beginning and blindly jump into them with completely wrong expectations.
See, while it may be true that the iron condor and credit spread strategies can kick off yields of over ten percent monthly and that they favor the trader by offering high probabilities of winning (in some instances as high as 80 and 90 percent) - what isn't being talked about is the risk to reward ratio of these trades - which can be as high as 10 to 1.
10 to 1! That means that in order to try and make just one dollar, you need to be willing to risk ten. Or, put another way - in order to make 100 dollars, you need to risk 1,000 dollars. Or - risk $10,000.00 to hopefully make just $1,000.00!
And as my dear old mammy used to say: 'that smells a lot like an awful bad egg'. Which in fact it is. That risk to reward ratio is nothing but a low down, no good, smelly rotten deal!
Even with the ten percent monthly returns and the high probabilities - all that needs to happen is for a problem month to come along (and it WILL, believe me) - and the next thing you know you'll be staring at a gigantic loss and a zero balance account!
However...
There is still hope...
Like I said before, I LOVE the iron condor trade.
And - I consistently make money from it.
So apparently, even with that atrocious risk to reward quandary, there must be a method to generate consistent income with this trade.
And there absolutely is.
It all has to do with the management of the trade.
As long as you learn the correct way to initially place these trades, then combine that with a super simple management technique and a few easy adjustment tricks - this risk to reward issue can be completely eliminated and no longer presents a problem.
Once you possess the correct iron condor knowledge and know how - and understand how to apply a couple super easy to implement adjustment tricks - you'll know exactly how to exterminate any problematic market threat that comes your way, allowing you to experience the iron condor trading strategy for all that it's 'actually' cracked up to be.
To learn these 'tricks' to trading the Iron Condor , go to this Iron Condor site and watch my free video. It will show you an extremely simple method for properly placing, managing, and ADJUSTING iron condor trades.
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