subject: Iron Condor Adjustments - The Iron Condor Has Two Faces [print this page] The Iron Condor has two faces (and I thank the good lord above that neither one of these faces belongs to Barbara Streisand - but then again, perhaps it's even worse)
The first face is the one most new traders are introduced to. When the iron condor and the rookie option trader first meet - usually the picture that is painted of the iron condor is one of magnificence - grandeur - a wonderful, little known, very difficult to lose from investment secret that has been hidden from the general public by market makers who didn't want to let the cat out of the bag. A trade that requires just a few minutes per month to manage - that can kick off incredible returns of over ten percent per month, and on and on and on.
Well, of course the rookie option trader instantly falls head over heels in love with the iron condor - and why shouldn't they? it's almost too good to be true!
And there in lies the problem. It IS too good to be real.
But it doesn't have to be that way.
You see - in actuality, the iron condor really is a pretty amazing trade. One that can take a very small amount of time to manage - and yes, one that can spit out some pretty incredible returns.
It's that most new option traders don't take the time to really learn and understand this strategy. If they did, they would become aware that the trade has two faces - or two sides if you will - and one of those sides can be quite dangerous - that if is not managed and handled correctly can deliver some pretty ugly losses to a trading account.
It all has to do with the iron condors risk to reward ratio - which can give off small win after small win after small win - hypnotizing us traders into complacency - then suddenly out of the blue (again, if you don't know how to make proper iron condor adjustments) smash us over the head with one huge loss utterly destroying our account.
The key to winning with this strategy is to understand that the the iron condor does have a dark side - but as long as a trader has the proper knowledge to manage those tantrums and fits that are occasionally thrown by the iron condor - and know how to make effective iron condor adjustments , this trade really can turn out to be all that it's cracked up to be.
