Still don't get why I end up losing on Iron Condor on NQ

#8

With NQ, you are gonna want to be looking for about $200 in premium for the overnight trades. Especially if you are looking to sell before the U.S markets open .

Also the break even stop losses wont really apply until near expiration. Meaning that if the market shot down, to your 4864.6 Buy side stop loss at say like 2am… That side would have closed out… but because there is still 14 hours until expiration for your sell side… You will still be showing a loss either until closer to the 4:15 expiration or if the market continues to really head downwards by a large margin.

For that trade, I think it was just a combination of a possible premium reset, and very little premium available at the start, that lead to the loss.

Try getting closer to the $200 premium when you open the trade, and see if that doesnt get increase you chances of getting a profit. (of course if the market is really volatile, that wont help)

#9

When closing an IC before expiration you always want to look at the current market price that nadex is quoting and not at the indicative index price. I believe that is were their is a confusion. A quick way to know if your in profit in the position is to look at the profit/loss column.

Here is an example:

#10

How did you calculate the break even?

#11

Easiest way I found is to use the Straddle/Iron Condor Calculator. located on main web site-Access Free Tools Tab-News. http://apexinvesting.net/straddlecondor08252014/straddlecondor08252014.htm

#12

Iron Condor Calculator

#13

I use the calculator on the website but I don’t get the same break even as you when I used the trade details you specified above. Could you take a screenshot of how you pasted the trade detail above into the calculator so I can see if I’m doing anything wrong? Thanks!

#14

also, do you set a stop trigger at 4864.6 on the 4840-4880 contract and a stop strigger of 4895.4 on the 4880-4920 contract, or is it vise versa? @craigmac @MATRIXBINARY373 @darrell

#15

Here you go…

#16

Short answer: Yes.

Long Answer:

4840.0 - 4880.0 = This is my BUY side so the stop trigger, if it goes the opposite side, i.e. LOWER and hit my breakeven price would be 4864.6.

4880.0 - 4920.0 = This is my SELL side so the stop trigger , if it goes the opposite side, i.e. HIGHER and hit my breakeven price would be 4895.4.

Personally, in regards to IC, seeing it only in words can be confusing. It falls into place when I can see it on the chart.

Therefore, If you look at my first screen capture you will see I marked the iron condor area in between two magenta lines and a yellow line which marks the 100% profit price right in the middle.

The upper Magenta horizontal line is where a stop trigger for a SELL is.

The lower Magenta horizontal line is where a stop trigger for a BUY is.

#17

ok makes sense. This is what I did on my IC last night on NQ, i set my stops at breakeven but I still lost money. I’m thinking it’s because they reset the premium because of the ADP Non-Farm at 8:15? Would it be better to enter these iron condors at 6pm and exit before the London open to avoid the premium resets? Whne do you guys typiaclly enter and exit these IC? Thanks in advance!

#18

Ideally if the premium is there… then yeah, enter as close to 6pm as possible.

Premium can change at anytime… Sometimes it works in your favor, other times not.

Do you remember how much there was when you entered??

Sometimes Ive had more premium at 3am than I did when I entered the trade at 6pm

My goal was around $20/contract, but I always tried to make sure I was out before the U.S markets opened

#19

There wasnt much premium at all cause I enter at 3:00 am after I got off work. But today I entered NQ at 6:05 and there was 98$ on each side. So I took the trade and set my breakevens. We shall see how the trade goes. If I lose money I’m gonna be so lost on what I did wrong😭

Ps. You used a lot of past tense, does that mean you stopped doing IC, or are you still doing them?

#20

@MATRIXBINARY373 matrixbinary

#21

You really dont want to do an IC on the NQ with less than say $160 in premium ($200 is ideal). Monday morning ones are a little bit trickier because Nadex of course doesnt start offering spreads/binaries on the Indices until 3am.

Keep in mind, that your breakevens are based on if you were holding it all the way till the 4:15 expiration

If the market moves in one direction by a large margin, the losing side will lose money quicker than the winning side is making the money

I stopped doing ICs a week before the Oct FOMC meetings. Way to much volatility for my taste. Then my Mom had one of her knees replaced. So I moved back home for a bit to help her out. Even though I had more free time, because I took a couple weeks off of work as well. It had to be based on her schedule, not mine :wink:

And Apex came out with some new toys to play with, so I have been in and out of demoing directional trading with those.

Also its kinda nice only having to wait 30 mins to make 40 pips vs 10+ hours (on occasion) (also out of a losing trade quicker if it hits a stop loss)

#22

So i had $196 total premium last night for NQ. I sold before US open and got $40. I looked into the IC cause it seemed like easy money while you sleep. Then i wake up at us open, sell my IC’s and trade NQ IZSS.

So if the break evens are based off of expiration, what would be the advantage of setting them if the majority of people exit the IC before the US market opens? If that’s the case, say for example you are down money just before us open on an IC, would it be smart to hold onto the IC till 4:15 so you break even?

Sorry about your mom! I wish her a speedy recovery. And thanks for your help so far!

#23

$40 per contract?? Way to go!! Always go for as much premium as you can get. Even if that means watching it for a little bit, or just skipping doing the trade all together.

Unless the market is crazy volatile or you just get unlucky with premium resets, generally you will have some profit before the US open or if its a loss… shouldnt be a whole lot.

Generally its recommended that you use a 1:1 risk to reward ratio for any IC. Which basically means sometimes you wouldnt even have to set a stop loss for the trades, if the premium was high enough.

However, it just comes down to you being able to stomach such a loss (hopefully your account can) Personally I just felt I would hit max loss holding on to a trade till 4:15 more often, than getting close to the max profit… That was just me though… There have been a few posts of people actually getting very near max profits on these overnight IC… So it does happen.

Also some people just wake up and close it before they leave for work as well. Hence the selling before the US open.

As for waiting to sell if you are down money before the US open… All comes with what you are comfortable with. There is a chance that the market rebounds and becomes profitable. Or like today… The market takes off in one direction and just keeps going in that direction.

But if you are trading directionally once the US opens. Then it might be better to close the IC for either a profit or loss. And then hopefully add to the gains or make up for any loss. Plus you wouldnt have to possibly be holding on to a trade until 4:15 (if you didnt want too) Since you would make/lose money quicker if trading directionally.

Thanks for the wishes about my mom… It was totally elective. Lots of pain to start, but she is doing a lot better and is actually scheduled to return to work on Dec 12th… Already planning on having her other one done next summer probably :neutral_face:

And you are welcome for the help. I’ll try when I can :slight_smile:

#24

Yes $40 per contract for NQ last night.

I guess i should clarify better. Say for example the market hits my break even trigger on one side, if i left the opposite side till expiration at 4:15 would i then be break even on the trade?

#25

I would think it would be about break even. However I have never tried it, so I dont know.

The only problem with that is you run the risk of the trade going back in the opposite direction.

I only had the market hit breakeven on me once, and then it reversed against me by something like 24 ticks shortly later.

.

#26

So it would be the most safe to sell the opposite side once one of the breakevens are hit?

#27

I think it comes down to if you wanted to risk it or not. This is just me, but I would probably make sure both sides were closed for the loss and just come back again the next day, But thats because I always wanted to get out before the U.S opened.