Today while still searching for the secrets of making consistent returns with option trading, I had an interesting conversation with an option trader. Many things he told me about I agree with him absolutely.
One thing that got my attention 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.” He was right, and it’s often advertised that it’s easy to make money with options because we can make money on any direction. However, this isn’t always the case.
If you are trading Iron Condors based upon what most courses teach, then you will understand what I am talking about. Using this strategy when it comes to trading in 2009, the amount that you are making is probably minimal. The Iron Condor option trade needs a sideways directional as opposed to the normal up and down direction. Predicting a sideways move is as difficult as it is to predict an up or down movement.
I’ve gotten several calls over the years from people that ended up losing large chunks of their accounts trading credit spreads and condors. It’s always the same story… “I was doing great for several months, and then all the sudden I lost nearly my whole account in one day.” I have heard it time and time again.
For precisely this reason I choose not to trade the popular Condors or Credit Spreads. If the RUT is at your short strike and there are only a few days left from the expiration, then you are trading options the same way that most people do, and you will be left having to tell the same story to your friend or, even worse, trying to hide the truth from your wife! If you think this is funny, you won’t even chuckle if this happens to you. A high stress level could also become a factor from this style of trading and really ruin your life.
San Jose Options Mentoring has redesigned Iron Condors and Credit Spreads in order to combat this problem. To help me keep a lower stress level as well as to avoid any dangerous situations, they have taught me how to use different techniques so that I am able to give the underlying more wiggle room. In most cases, the less adjusting you have to do to your condor the better off you will be.
By using their developed techniques, I was able to lock in my profits on Condors. I learned from them how to stay in the trade a little longer after I was able to lock-in my profits, which is unlike most options trader who after they have made a profit exit their trades.
If a Condor should ever move against me, by using the techniques which were taught to me I will be able to morph into a new position and make adjustments to keep me in the game! When most traders would bite the bullet and move on because of a bad month, I will be able to get an excellent, free trade from it.
In the end, win or lose, I have developed an impressive way to trade Iron Condors along with other strategies.
Trade options, not your livelihood. Learn safer ways to Trade Iron Condors with San Jose Options. Visit now for your free Video!