To Trade or Not To Trade – That is the question!

600-point down days, 300-point daily ranges and many intra-day big reversals are not normal – at least not i the last 18 months. If, over the past year, you became accustomed to selling puts 5% below the current stock price, or if you sold iron condors with the short strike prices one standard deviation out-of-the-money, then you had to be nimble in the last two weeks or you had "your headed handed to you." Welcome to the frustrating world of trading! Market conditions change – and sometimes on the provervial dime. Being "lulled into complacency" is never a good state for a trader.

What should you do now? First, you must decide if you even want to trade in this environment or if you want to take some time off and wait for "normal conditions" to return. Second, ssk yourself, "Has the trend in my primary stocks changed?" "Are the old chart patterns still working?" and "Do I need new parameters for choosing option strike prices and/or stop-loss points?"

Now is a time to get back to basics. Review your assumptions and make a new plan.