An iron condor is a market neutral strategy that performs best when the underlying stock or index trades within a range, as opposed to making a large move in either direction. Despite our wishes, sometimes those big, unwanted moves occur.

What should you do when that happens?

• Close your eyes, and hope the market reverses direction?



• Close the position and lock in your loss? If 'yes' how long do you wait before making that decision?
  
  
  
• Are there alternatives?

Here's what I believe represents a trading philosphy that allows you to succeed over the long term:

• There are no mandatory rules



• There is no single 'best' adjustment strategy that always produces the best results



• To succeed over the long term, it's important for you to



• Protect your profits and not gamble them away.



• Not allow small losses to grow into huge losses



• Be willing (not anxious, but willing) to accept losses and move on to another investment



• Understand that



• Iron condors provide profits that are limited to the cash collected.



• Potential losses are higher than potential profits.



• Most of the time you collect all, or a substantial part of that maximum.



• This method cannot win every time and you are going to incur some losses.



• Your job is to avoid allowing any loss to approach that maximum.
  
  

Specific adjustment strategies are discussed here.