The iron condor is one of the most popular option strategies available to traders. Unfortunately, it is also possibly the most dangerous.

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 stop.

I don’t want you to get the wrong idea here. So let me explain something.

I actually LIKE iron condors. I like them ALOT.

I think the iron condor really IS a great trade.

And those claims and stories of ten percent monthly gains and ninety percent probabilities? They are absolutely true.

The big problem is that there is some very important information being left out of those iron condor claims and stories. Information that I’m sure would keep alot of rookie option traders – who frankly just don’t know any better – from blindly making that ‘over-confident’ leap into the iron condor abyss.

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.

That means that while trading these trades you are putting at risk 10 bucks for the chance to make just 1. Or – in reality, in the instance of say a standard ten lot index iron condor, you are risking ten thousand dollars for the chance to make just one thousand dollars.

And as mammy used to say to us kids – ‘that ain’t nothin but a real awful bad egg’.

Because once you do the math you find that even with those glorious monthly returns with 80 to 90 percent probability of winning – all it takes is just one problem month to come along and cause a loss that will completely obliterate the 8 to 9 wins you’ve managed to rack up – as well as potentially the rest of your entire account!

However…

There is still hope…

As I mentioned earlier – I really do LOVE trading iron condors.

Over the last ten years it’s been extremely profitable for me.

So apparently, even with that atrocious risk to reward quandary, there must be a method to generate consistent income with this trade.

And yes, there certainly is.

It all revolves around how you go about handling the trade.

That risk to reward problem quickly becomes a complete non issue as soon as you educate yourself on the proper way to initially set these trades up and how to correctly manage and adjust them.

You just need to take the time BEFORE jumping into the iron condor pool to equip yourself with this little bit of knowledge. A few simple ‘tricks of the trade’ – so when those problem months DO come along (and they WILL believe me) – you will know exactly what you need to do to immediately squash that threat, easily adjust yourself out of the problem, and experience the iron condor for all it’s ‘really’ cracked up to be.

To learn a much ‘better’ way to trade the Iron Condor spread for monthly income, visit this Iron Condor Adjustments site for simple step-by-step instructions on how to correctly place, manage, and ADJUST iron condor trades.

Technorati Tags: currency trading, finance, forex, forex trading, investing, investment, iron condor, option trading, personal finance, stock, stock market, stock trading, trading, wealth building

The Forex market used to be the realm of governments, banks, financial institutions and very rich people. That was not so long ago either. Fifteen years ago, perhaps, maybe even less. The development that altered all that is the Internet. These days, the Forex market is played by small companies and even ordinary people as well as the big players of yesteryear.

Whether or not it is a level playing field for the big and the small, you will have to decide for yourself, because so much scandal has come to light of late about irregularities in other financial markets. However, the Forex is so large that it is difficult to think that it can be manipulated. (Although George Soros is blamed for a run on the GBP in the early nineties).

It is probable that the big players have more access to information that the rest of us. Particularly governments as they make the policies that affect the way a currency moves. Information is the key to profitable Forex trading. Therefore, you have to know the terminology of the Forex market; how to utilize the financial instruments that your broker makes available to you and you have to be up-to-date on the information affecting your target currencies.

Therefore, it stands to reason that you should choose to open an account with a Forex broker that provides the most advanced trading platform, provides the best training and distributes the best, up-to-date news and market analysis.

The best way of selecting an online Forex trading system is to Google “online Forex trading system” and pick six of the most impressive to you and save them into a folder in your ‘Favourites’ list. If you are new to Forex trading, you should read the companies’ training literature. This will give you an impression of how much the broker cares. Try putting some of the doctrines that you learn into practice in a ‘practice account’. The practice account is free, but sometimes you may only use a practice account for a month or so.

You will discover that some online Forex trading systems are easier to use than others. One online Forex trading system might suit you but not suit me, it is a personal preference. Some online Forex trading systems will have all the bells and whistles, but you may like a simpler system. For example, if your computer is slow or your Internet connection is slow, you may want to be able to turn off any elements that you do not need in order to speed your system up.

Another feature that you should pay close attention to when choosing an online Forex trading system, is the system’s functionality for technical analysis. You will need free access to the historical data of the currencies that you are interested in. These data can then be interpreted by graphs, which may be able to help you determine which way a particular currency pair may go. Breaking news is also very important and your broker should provide you with all the latest news stories ‘hot off the wire’.

Owen Jones, the author of this article, writes on many topics, but is now concerned with a currency trading tutorial. If you are interested in dealing with an FX Trading Account, please go to our web site.

Technorati Tags: career, currencies, currency trading, finance, forex, government, hobbies, investing, online business, other, personal finance, politics, stock market, uncategorised, wealth building

If someone wants to take up Forex trading, it is clear that some form of training will be needed. After all, the minimum amount of money needed to open a Forex trading account is usually about the $2,000 mark. Nobody wants to lose that much money. There are various ways that training can be accomplished, but whichever training route the aspiring Forex trader wishes to follow there is one indisputable fact – training is necessary.

Naturally, any Forex trading training will include learning the terminology, various trading procedures and concepts pertaining to Forex trading. There are basically two reasons why a future Forex trader may need training. The first is if the student wants to take up a professional post with a Forex training company. The second is because someone wishes to make some extra cash in his or her free time by working for him- or herself.

A professional Forex trader will be handling millions of dollars a year and possibly a great deal more than that, so a top-class education is a necessity. This will usually mean a university education and rigorous in-house additional Forex trading training.

This is because the Forex market is the largest market in the world by far and millions of dollars can and do change hands in seconds. This requires nerves and great skill. It also takes wisdom and discernment.

Since the amateur is only trading with his own money, the level of Forex trading training is entirely at the trader’s own discretion. However, the Forex trader of either type will have to learn how to construct charts and also how to read them. Technical analysis is an indispensable part of working out which way a currency will move against another currency in the short or long term

The Forex student will also have to learn about the different kinds of orders, margin, leveraging, rollovers, trading psychology and risk assessment. You will also have to learn some personal skills like how to become disconnected from your purchases so that you deal with your head and not with your heart. Emotion has to be totally detached and you must not take it to heart if your hunch proves unjustified.

You can acquire this training from several sources including day and evening classes, Internet seminars and webinars, correspondence courses and by studying the free literature given by all the best Forex trading companies.

This latter part of Forex trading training is very significant because each Forex broker will have its own software which will carry out essentially the same functions as everyone else’s software, but which will also be slightly different to employ.

The successful Forex trader might want to trade in the very short term – hours, minutes or even seconds – so it is indispensable to know precisely how the Forex trader’s software works or you may miss an opportunity. Forex trading training is crucial if you want to reduce your chances of losing and maximize your chances of making money on the Forex markets.

Owen Jones, the author of this piece, writes on many topics, but is presently concerned with how to be a currency trader. If you are interested in dealing with an FX Trading Account, please go to our web site.

Technorati Tags: career, currencies, currency trading, finance, forex, government, hobbies, investing, online business, other, personal finance, politics, stock market, uncategorised, wealth building

Forex trading used to be limited to fairly wealthy, long term investors and all trades had to be carried out manually by a broker, which might or might not have been your bank. The client had to telephone his broker, who would pass on any knowledge the company had about latest developments in the currency markets and the client and the broker would come to a decision whether to buy a new position, or sell or hold an existing position on the strength of that intelligence.

It followed then that the best brokers were those with the most pertinent and up-to-date information. In addition, trading was not cheap, so it was better to trade only several times a year for long term growth in order to keep overheads (fees) to a minimum.

This set-up has been drastically changed by the Internet. These days, most Forex trading platforms have been computerized, so, although charges do differ, they are a lot lower than they used to be because there is less human involvement and there is more competition. The knowledge of the markets that brokers defended zealously from other brokers is now common knowledge for those who want to find out, because all key stories are sent around the world by the press agencies.

The two main strategies in investing of any kind including foreign currencies are fundamental analysis (keeping up with the news) and technical analysis. In combination these two research strategies can be called ‘due diligence’. Due diligence is the investor’s main protection against big losses so it should be learned from the beginning.

Technical analysis involves interpreting charts. There are literally hundreds of different charts which try to forecast a currency’s future movement (up or down) by analysing historical data or what it has done in the past. Some investors swear by charts, others say that past performance can not have any influence on the future events that might influence a currency’s movement.

For instance, the GBP (British Pound) may have been doing very well for months and the trend is up for the long term, but then terrorists explode a series of bombs in London and the GBP nosedives, That could not have been predicted by charts.

Having said that charting is interesting and almost certainly has its uses, not least in forecasting highs and lows. For instance, say the Thai Baht has historically been around 40 B to the USD, say for 15 years and Thailand is a very popular holiday destination. If the Thai Baht (THB) strengthens to 30B / USD, people will stop going there which will harm the THB and tend to bring it back towards 40:1 again. Charts would propose acceptable highs and lows based on historical data.

A common method of predicting these highs and lows is the use of Fibonacci retracements. Do not be concerned about all these charts, they usually come built into any charting software you use, whether you buy it or use the Forex trading company’s free software.

Fundamental analysis is the other component of successful analysis or due diligence. Every week, figures are disseminated to make public some economic detail of a particular country such as non-farm payrolls or unemployment figures that can perhaps have an erratic effect on the Forex markets Sometimes it is wise to stay out of the markets when important announcements are being made.

Owen Jones, the writer of this article, writes on many subjects, but is presently involved with Forex dealing. If you are interested in dealing with an FX Trading Account, please go over to our website.

Technorati Tags: career, currencies, currency trading, finance, forex, government, hobbies, investing, online business, other, personal finance, politics, stock market, uncategorised, wealth building

The Forex is a trading system for international currencies, similar to every country’s stock exchange system. However, the main distinction is that the Forex is massive when compared to any stock exchange. In fact, it is enormous compared to all the stock exchanges in the world combined. The Forex is bigger than all the world’s stock exchanges together, turning over more than 2 trillion dollars a day, every day.

If you open a Forex account with a good Forex trading account provider – a broker – the company will supply you with reports on what is happening in the international currency markets. Some provide this information free of charge, other companies make a charge. The state of affairs is similar with regard to trading overheads.

Some Forex trading companies charge a fee per trade and others charge a spread or a percentage. You will have to work out which system is best for you. This is equally true of the minimum trading amount. Some firms allow a minimum trade of $100 others $1,000.

You also have to check how long your trade is valid for at minimum. Some companies insist on a 30 day minimum others demand a 48 hour minimum turn-around. If you go with a long trading period, you will not be able to take advantage of very short term swings, which is similar to day trading on the stock exchange. Day trading is not recommended by experts, because it is very risky, although it can provide good short term profits.

You can trade Forex on line or and off line, it makes no significant difference except that on line dealing is usually faster and cheaper. These are benefits, but the technicalities of the trade are basically the same. Being able to trade on line also means that you can trade from anyplace that there is an Internet access point anywhere in the world, which is cheaper than phoning your order through to your broker while you are on holiday.

Most online Forex trading systems or platforms will be ‘execution only’ services. This indicates that they will carry out your instructions, but will not offer any advice whatsoever. You can opt to work with an adviser from the brokerage firm, but that usually costs a great deal more and can slow things down too.

Whether you work with an adviser or not you will have to find a Forex broker that you can trust. If you are taking advice, you have to believe that your adviser knows much more than you do or else there is no advantage. However, the advice you will be given will probably be the Forex industry’s standard point of view. Do not expect it to be revolutionary or trend-bucking. They are not going to go out on a limb for you, in case you take legal action, although they may have put get out clauses in the agreement anyway.

However, even if you are on execution only, you will still want to work with a Forex trading firm that you feel you can trust to carry out your instructions in a timely manner. If you work out and feel that right now is the time to buy the dollar against the pound, you want to trade right now and not in four hours time when the exactly right entry moment has slipped past.

Owen Jones, the writer of this piece, writes on many subjects, but is presently involved with Forex dealing. If you are interested in dealing with an FX Trading Account, please go over to our web site.

Technorati Tags: career, currencies, currency trading, finance, forex, government, hobbies, investing, online business, other, personal finance, politics, stock market, uncategorised, wealth building

Most of the people who invest in stocks, only know about the New York Stock Exchange (NYSE) or the NASDAQ over the counter market. Futures trading is one of the ways to grow your wealth. There are many dozens of futures contracts that you can trade ranging from crude oil, gold, ethanol, heating, gasoline, silver, copper, wheat, corn, coffee, soybeans, pork bellies, cattle, interest rates, currencies and others.

If you want to profit from commodities than futures trading is the best and direct method of getting access to the commodity market. There are several active futures trading exchanges in the US. Three of the world’s largest futures exchanges are located in Chicago.

The largest futures trading exchange in US is Chicago Mercantile Exchange (CME). A large number of futures contracts get traded on CME that includes commodities, stock index futures, foreign currencies, interest rates, environmental futures and others.

The commodities futures that get traded on CME include cattle, butter, limber, pork bellies, Goldman Sachs Commodities Index, live cattle, milk, lean hogs, feeder and fertilizer. Now as said before, commodities is an important asset class. CME provides you with the opportunity to trade many commodity contracts.

CME provides you with the opportunity to trade futures contracts on these stock indexes as well as their mini versions the E-Minis. Now, one of the ways to trade stock market is to trade stock indexes like the various S&P 500 like the S&P 500 Midcap, Small Cap as well as the Russell 2000 and the NASDAQ 100.

GLOBEX is the Electronic Trading Platform owned by the CME Group that allows the electronic trading of these contracts almost 24 hours a day. So you can easily trade almost all these contracts from the comfort of your home electronically using your computer.

The world premier futures exchange is the Chicago Board of Trade (CBOT). The futures contracts that are available on CBOT include agricultural futures like the corn, wheat, soybeans, ethanol, rice and mini contracts on corn, soybeans and wheat.

A mini version of Dow Futures called the E-Mini Dow is also available. You can also trade mini versions of gold and silver futures contract on CBOT. CBOT gives you the opportunity to trade one of the most popular stock indexex the DJIA Dow Jones Industrial Average) in the form of Dow Futures.

Now the best place to trade crude oil, natural gas, gasoline as as well as a host of other energy futures in the NYMEX (New York Mercantile Exchange).This is infact the global hub for energy trading and offers futures contracts on unleaded gasoline, heating oil, electricity, light sweet crude, natural gas, propane and coal.

Futures trading is something that is not difficult to do once you get the hang of it. In the beginning, you should just paper trade these contracts for a few months! NYMEX also provides you with the opportunity to trade precious metals like the gold, silver, platinum as well as palladium. You can also trade metals like copper and aluminum on NYMEX.

Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures secret that can make you rich. Download this very simple 1 Minute Forex Trading System FREE that makes money instantly.

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