January 2017 Pre-trade Analysis

January is shaping up to be an unusual month. It definitely underperforms compared to the Monthly Strategy as a whole, with one odd exception. Take a close look at the risk v. reward chart below and you will see near parity between January and the overall winning history at a 40% target profit.

This is a really beguiling setup that can be explained in two parts: First, January has fewer data points than most months and less data means more erratic trend lines. Second, and perhaps more importantly, it seems there is a threshold, or glass ceiling, for monthly plays executed in January. Once a trade breaks north of the 30% mark, it is much more likely to hit 40% (but just).

While this month may seem challenging, experienced members will know to concentrate on the lower end of our target guidelines to lock in profits.

Key Stats

116

Total
trades

86

Winning
trades

74%

Winning
history

53%

Average
return

Risk vs Reward

January performs on par with the statistical averages for the Core at 40% target profit.

Successful Picks

AAPL is the clear winner here. Could this be an artifact of the massive purchase of iWhatevers in December or a run up before earnings? It will be interesting to see if this trend continues.

Stock Plays Wins Winning History Average Return
AAPL 5 5 100.00% 111%
AMZN 7 5 71.43% 62%
BIDU 5 4 80.00% 52%
BRCM 6 4 66.67% 89%
DIA 13 10 76.92% 54%
EBAY 8 7 87.50% 47%
IBM 8 6 75.00% 66%
QQQ 10 8 80.00% 40%
YHOO 5 3 60.00% 17%

Keep in mind we may no longer trade options for some of the stocks listed here.

Remember, no matter how great the statistics are or how good past trades were, you must set realistic limit orders to trade this strategy profitably. We highly recommend member's focus on our own target profit goals! As always, make money and happy trading!

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