Monday, October 8, 2007

What is an Iron Condor?

The Iron Condor option trading strategy is purely a market neutral strategy. An Iron Condor is constructed using a bull put credit spread together with a bear call credit spread on the same underlying asset to create a market neutral position. Iron Condor Spread can be entered a one order (simultaneously selling both bull and bear spread at the same time) or it can be entered as 2 separate orders (a bull put spread and a bear call spread separately). We prefer the latter because we can collect more premium by timing our entries through the use of technical analysis. A market neutral position can be profitable in a bull, bear, or sideways market. Sometimes you may hear that this is a non-directional trading strategy.

Option friendly brokers (brokers who understand option trading) offer more leverage for Iron Condor positions as they provide margin relief because they know that you cannot suffer simultaneous loss for your bull put spread and bear call spread.

For example: Let's assume that SPX is trading at 1300. If you enter into a bull put position on SPX at 1220/1210 and a bear call spread at 1380/1390, your profit zone is between 1220 and 1380. This means that as long as SPX expires between this range, you will profit. Theoretically you cannot lose on both positions because SPX cannot be more than 1380 and less than 1220 at the same time.

Since you can only suffer 1 losing spread, option friendly brokers only require that you maintain cash for only one side of the Iron Condor. Normally, it would be the spread with least premium collected.

Using the same example, let's say that we have collected a premium of $0.60 for the bull put spread and $0.80 for the bear call spread for a total premium collected of $1.40. Each spread requires $1000 per option contract and you write 10 contracts each. You will need a minimum of $10000 for 10 contracts. However, because you have collected $0.60 (the lesser of the 2 spreads), you will require only $9400 ($10,000 - $600) as cash requirement. Although you have written 20 contracts, only $9400 is required in your brokerage account.

Now here is the fun part. Your profit is $1400 for a risk of $8600. As long as SPX is within the profit zone of 1220 and 1380, the Iron Condor Spread will be profitable. The return for this Iron Condor position is 16.3% ($1400 divided by $8600).

Many professional traders use the Iron Condor Option Trading Strategy to increase their chances of success. Many have achieved a high winning ratio of 80% to 90%. When compounded, this strategy can accelerate your portfolio growth as well as your monthly income exponentially. Iron Condor Spread can be used as an aggressive trading strategy but smart traders will benefit fully using this approach as low risk investment strategy.

Copyright (c) 2007 CashFlow Avenue

Market Neutral Strategies are powerful when applied correctly. Iron Condor and Credit Spread Trading are easy to apply with little or no monitoring required.

Fibonacci Trading, Your Compass To High Probability Trades

When you start trading the currency markets, or any other market, you usually think that every trade is worth the risk and that a good trading system will teach you how to win in every trade you make. But thats far from the truth.

One of the first things you must realize as you enter the world of trading is that not every trade is worth the risk and every professional trader aims only for those high probability trades that will surely make them money. These are always trades that are highly predictable with the particular trading system you are using.

For example, by the combination of trend and Fibonacci techniques you can obtain very powerful signals for high probability trading. By using these indicators, trend-lines and Fibonacci levels in conjunction you will greatly improve your chances to pinpoint a highly profitable trade.

You may be asking by now what Fibonacci is?

Fibonacci trading is directly related to the existence of specific mathematical proportions that appear in many places and structures in nature. Fibonacci was the last name of an Italian mathematician who is remembered by his famous Fibonacci sequence. The definition of this sequence is that its formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13. In the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc. These ratios are what determine the famous Fibonacci Levels.

Learning the correct use of these levels can positively impact your trading success. Fibonacci levels can perform as a compass guiding you to high probability trades.


Forex Swing Trading Swing Trade Your Way To Regular Profit

The rise of online forex trading means that anyone can swing trade for short term profits, Its not only profitable, its easy to learn, good fun and that's what trading should be.

Forex swing trading online provides the ideal market for the methodology of swing trading.

So why are currency markets the ideal for swing trading?

Lets first of all define what forex swing trading actually is

Forex Swing trading aims to identify intermediate swings in price, that can last from anywhere from a few days, to a few weeks.

This is not day trading day trading has no reliable data as the period is to short and you cant make money.

Swing trading here means still looking at short time frames, but the data is reliable enough for you to get the odds in your favor.

The following conditions make FOREX swing trading potentially such a lucrative way of trading

1. Liquidity

Each day the global forex markets see trillions of dollars transacted.

This is a 24 hour market and is the worlds biggest investment marketplace.

The huge size of the markets allows traders to open and close transactions quickly, to lock in profits and minimize losses.

2. Volatility

Currency markets are volatile and this is why a short term trading method such as forex swing trading can be so profitable.

A volatile moving market is essential for swing trading.

This volatility means a large number of potential opportunities that are presented to forex traders.

3. Transaction costs

Low transaction costs that were once the preserve of large institutions, now any trader can get 3 5 pip spreads meaning short term trading is viable for any trader

Swing trades come regularly

While currencies present long term trends, there are many profitable swing trading opportunities within them.

These shorter trends last for a few days to a few weeks and they offer regular high reward low risk trading opportunities for forex swing traders

5 Psychology is easy to learn

Many traders lack patience and want to have quick action well thats exactly what you get with forex swing trading.

FOREX swing trading offers them a lot of trades regularly and you dont need the patience of a long term trend follower.

Swing trades tend to either run to profit quickly or loss, keeping the trader interested, motivated, disciplined and focused.

This is an ideal way of trading for someone who loves trading.

Forex swing trading is also

Easy to learn you can simply use support and resistance lines with some confirming momentum indicators. For example, we use just stochastics and RSI Its simple and a stress free way of trading and best of all can make big profits with low risk.

FOREX Swing trading is fun and very profitable and thats the way trading should be.


On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at

Evaluating A Money Manager

Scams and frauds are designed to take your money through false promises and phonyclaims. Money management is supposedly designed to increase your net worth. Sometimes these two worldsmeet and the results are not in your favor, i.e., youhave a considerable decrease in net worth.

The information in this article won't keep future money managers honest but it will help you find the one who is right for your situation. There are four criteria you must consider before you give your money to anyone to manage.

1) Philosophy-- This is the thought theology used by the money manager to make your money grow. In other words, does (s)he focus on stocks, options, mutual funds, annuities, a blend of investment vehicles, etc.? Does this philosophy coincide with your risk tolerance? If stocks are too risky, a manager concentrating in that arena isn't for you. The philosophy also points you to their performance.

2) Performance-- We all know the markets are not stagnant. They go up, they go down. No investment manager can predict the market with absolute certainty. But, they should perform well, or even above average, in their specialty. For example, a stock focused money manager in today's market environment should have performance numbers that would make even Warren Buffet take notice. You want as long a performance record as possbile. To be fair, one market cycle should give you a decent indication of the manager's performance in his/her area(s) of expertise.

3) Process-- This is the means the manager uses to select securities for the portfolios. For example, does (s)he rely
only on in house research or does (s)he incorporate research
from outside sources? If so, who are they and on what frequency are they used?

4) Personnel-- Besides wanting to know the manager's experience, you'd be wise to learn all you could about the folks working in the office. Who actually manages the portfolio? His/her experience? How long has (s)he been in business? Who will manage your account when (s)he is out of the office, on vacation, on business?

Some people would say cost is one of the criteria.I say it is, but to a lesser degree.In over 30 years in this business, I can guarantee that paying the highest commission did not necessarily result in receiving the best advice. Paying the lowest commission did not necessarily result in receiving the worst advice.

Cost comes in the form of fees and commissions. ALL money managers charge. Cost, initially,should not be in your criteria because it often becomes the ONLY determining factor. That will skewer your thinking and could result in not having a
winning team working for you. Make the above four parametersyour
primary criteria and cost will take care of itself.

How? You will be quoted a charge. If you are not comfortable with that price, negotiate. All fees and commissions are negotiable. If the manager refuses to negotiate, then and only then, make cost a member of the criteria team.

This article won't solve all of the money management problems or costs associated therewith. However, it'll at least start you thinking in the right direction and keep
your money in your pocket until you are ready to hand it over.

2004 (c) This article may not be reprinted without permission of the author who can bereached at

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Save For Your Childrens Future With A Child Trust Fund

If you're expecting a newborn baby or your child was born after 1st September 2002 Child Trust Funds are something you need to know about. Essentially a new government scheme that hopes to encourage saving, it means that every newborn baby will receive 250, or for low income families 500, to be invested tax-free and made available once the child becomes 18.

Alone this is unlikely to result in a particularly massive pay out (the full 500 would be worth 1,410 based on an estimated 7% growth) but family and friends will be allowed to add up to 1,200 a year in additional investment. Any income arising from these contributions will be tax free. There is certainly the potential then to generate a decent sized sum. The scheme should therefore open up the possibility of building significant savings for their child to a wider demographic than might previously have been the case. Far more children will in theory now be able to make use of a handy lump sum that could be put towards university fees or a first car, anything they want in fact.

CTF's are designed to be as simple and transparent as possible for parents. First up a voucher will arrive from the government, there's no responsibility placed on the parent to make an application. It's then down to you to decide how you want to invest it although there will be limitations nothing too high risk essentially. Even if you fail to invest after a year HM Revenue and customs will do it for you, after which point parents are free to assume responsibility for the account. In addition the government will even contribute another 250 (again, twice as much for low income families) when the child reaches the age of 7.

Aside from being a useful savings tool for future generations and especially those children who may not otherwise have had anything set aside it's also being plugged as a scheme aimed at financial education. Giving kids a potentially valuable experience of real money management seems to have been one of the key motivations behind the idea with children set to receive relevant financial advice and education leading up to the point at which they are permitted access to the money. Perhaps the aim is to help go someway towards instilling a saving habit that might counterbalance an increasingly buy now, forget about the consequences' culture.

Give your child a head start by saving for their future with an ASDA Child Trust Fund, a name you know and trust.

Copyright (c) 2007 Jay Smith

Ka-ching! Ka-ching!

Putting your 401k in auto-pilot could be the right choice for your retirement. Studies have shown and you can probably attest to the report that most families cant, dont, or wont put enough monies back for their retirement. The sad truth is, two thirds of American workers over 50, have less than $50,000 set aside in their retirement accounts.

IRAs and 401k accounts are a great slow pay retirement method of choice, but Again, the keyword here is choice. Its hard to contribute to a rainy day account when its already raining. With several American companies eluding from company pension plans and paying their employees with stocks or stock options, the new trend is to have a percentage of their employees paycheck automatically placed into a 401k account and this is slowly improving the retirement outlook across the nation.

IRA and 401k accounts are beginning to show signs of an upward trend in both account balances and popularity among American workers. Since many companies have either failed to perform as expected, or in worse case scenarios, have cut back mainly from the employee benefits, auto-enrolling and auto-contributions into 401k accounts are really a positive, yet slightly painful approach to generating a better retirement outlook for most Americans.

Considering the constant erosion of the American workers benefits and the increase in healthcare costs, it is to all of our benefit that we take a more aggressive stand to planning our retirement.

Auto-enrollment has shown that employers who automatically enroll new-hires and current workers into a 1 to 6 percent 401k payroll deduction with the option to allow employees to opt out has only seen a small percentage of employees actual choose to stop this deduction. By urging or actually enrolling employees into their 401k accounts has taken the positive steps toward seeing a more optimistic future for retirees.

Auto-investment is where a worker is automatically enrolled in a 401k plan and is generally assigned to an investment option of the companys choosing or the employee can opt to choose from a list of investments such as a money market fund. To further offer more options, diversifying an employees choices can give an active investor the opportunity to select and track their monies for greater returns.

The main purpose of all the different options available is to strengthen the long term investing in your future and your retirement. Whether its an IRA, 401k or some other savings plan, you are responsible for your financial future. Any assistance that you think you need, there are financial advisors that will show you your options and what fits your budget and affordability to get the most from your efforts. Explore your options and expand on your understanding of how retirement should work for you instead of working through your retirement age. We all think we can live and work forever but the reality is quite different. The burden of support for you should remain with you.

Jim is an online entrepreneur that shares his findings and reports them for the benefit of his readers. Today he has some valuable insights on retirement planning.

"Fears Only Enemy Is Action"

What a great statement!

I just heard someone use it in the context of personal and financial success and it struck me as a brilliant summary of an issue we raise in the SMG Tutorials.

Fear is a huge issue with a lot of traders. And interestingly, not just fear of failure but also fear of success.

I think there are two keys to taming fear [you can never eliminate it so dont even try!].

The first and most critical is the one noted above action. Action can tame fear in an instant. But it needs to be the right sort of action.

If you have a fear of heights, going bungee jumping may not be the best way to address it! But standing on a high bridge is a good first step.

In the same way, if you have a fear of losing your trading account, trying to face it down by putting it all on the line in one trade is not the best sort of action.

But taking considered, appropriate action [like the strict use of stop losses] is a way of taming fear. And getting past the paralysis stage that fear can create.

The second key is focus. By this I mean keeping in the moment and concentrating on the immediate action that is required to move you forward.

If your focus is too broad you can become overwhelmed by the possibilities. Or you might start to worry about things that are beyond your control or simply dont matter like what

But when you narrow your focus and remain in the moment in regard your trading, fear will be sidelined. The simple reason for this is that you cant concentrate on two things at once!

And again, this will help overcome the paralysis that can be created by fear.

So if you suffer from fear in your trading - action and focus are the key!

David Chandler

Ordinary People Making Extraordinary Profits!

For a free mini-course on stock and options trading click the following link:

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The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn't worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Article Marketing Bootcamp: 5 Tips for Creating Content

The heart of any article marketing strategy is the creation of quality content. It can also be the hardest part of the process if you don't know the shortcuts and tricks of the trade. Here are a few inspirations and idea sparkers to help you build a large library of article marketing goodness.

1. It's all in the list

Top Ten lists, check lists, to-do lists - people love lists. And lists are easy to create. Just choose a topic (say, tax preparation) and an angle (mistakes people make) and get started writing down examples. Fill out each list item with a paragraph or two of advice, and then jazz it up with an attention-getting title, such as "Top 5 Mistakes People Make When Doing Their Own Taxes." Before you know it, you've got a winner.

One trick when it comes to lists is to stick with odd numbers, especially 5, 7 and 9. For some reason, the human mind seems to view odd numbers as exciting and attractive, while even numbers come across as flat or incomplete. Less than five seems skimpy, while more than 9 points is simply too much information for one article to cover - in fact, I'd stick with 5 and 7 just to be on the safe side. If you have more vital list items than that, break them up into an article series.

2. Questionable material

Another shortcut to writing an article is to pose a question in the opening paragraph, then use the remainder of the article to answer it. Maybe your friends and colleagues are always asking the same questions about your topic. If so, make a note and use them to spur article ideas. Jot down questions you get from customers, too. These are the best source for business-related Q&A articles.

Also, this is a good time to go through your website's FAQ. In many cases, the questions you have there regarding your business could each be the foundation for an individual article or even a series of articles, depending on how complicated the answer is.

3. Step by step

How-to or other instructional articles are also popular, and easy to write if you know your stuff. Make a quick outline of steps involved in the process, note any tips or hints that might save your reader time and frustration and get to writing. Just to make sure you haven't overlooked anything, ask a friend or colleague who is unfamiliar with your topic review the piece and see if your instructions are clear, complete and easy to understand.

4. Turn on the news

Keep your eye on the news, both in your subject and in general. What is going on in your field of interest? What effect will news items have on your subject? What changes are taking place in the world that will impact your topic?

Look outside the immediate scope of your topic - changes and trends in one industry, field or process can often be applied to others. This is a great opportunity for creative and innovative idea cross-pollination, and doing this will automatically brand you as a cutting-edge thinker in your field of interest.

5. Play it again, Sam

Finally, look around you and see what you can repurpose from existing content. Your blogs, ebooks, workshops and other existing IP (intellectual property) are great sources of inspiration and even directly repurposed content for articles. I'll talk more about this process in Article Marketing Bootcamp: Reduce, Reuse and Recycle Your Content, but the core of the issue is this - why create your article content from scratch when the chances are good that you have enough material laying around you right now to get a great head start with just a little cutting, pasting and editing?

One of the hardest questions for writers to answer is also the most common - where do you get your ideas? Hopefully this article will help give you the inspiration you need to begin creating your own stock of article marketing content. Of course, there are as many ways to come up with content ideas as there are writers, and no doubt you'll stumble upon a few of your own as you gain experience. But these examples should provide you with enough to get you started on the road to successful article marketing.

Author Info:
Soni Pitts is a professional freelance writer and editor, with experience that ranges from short web articles to full-length ebooks and beyond.

"Need professional quality writing, but hate to write - or just don't have the time to do it all yourself? Don't let less-than-perfect writing skills or a tight schedule leave you at a loss for words. Query writer [at] for a free consultation, samples and a quote."