Ready for the January Effect? Swing Traders and Investors Should be Prepared

This is an important video because you will learn the January Effect, see how it has accurately been used in recent years to predict if the year will close higher, and be prepared for the upcoming prediction once January 2021 is over.

So, are you ready to learn how to forecast the 2021 trading year?

As a reminder, the next Group Mentorship begins Jan. 19, 2021. You can get all courses and software with Lifetime licenses. Your instructor will give you a full plan to trade the markets every day. You’ll know what to look for and what to do when opportunities occur. Click here to find out more.

If you want to follow along with the above video instruction, pull up a daily E-mini S&P 500 chart. On NinjaTrader, this would be ES 03-21 and select Daily from the chart type drop-down at the top of the chart.

So far, eight days into January, it appears price is moving up. That does not mean we can put the January Effect into practice. Remember, we can only use the January Effect after the month is over. Price action in January must “prove” whether the year will also end higher than it opened. Therefore, expect a video in early February with confirmation of what to expect. At that time, we will use the ES 03-21 daily chart to see if the January 2021’s closing price is higher than the opening price. If that is the case, we expect 2021 to be an “up year” as well, with a greater closing price in December 2021. This is the basis of the January Effect.

In the video, you will see examples from 2020 and 2019. John Paul claims the January Effect has approximately 90% accuracy. Of course, past performance is not indicative of future results. Please understand that trading involves risk of financial loss.

What can you do with this information? You can find intraday trades as well as swing (multi-day) opportunities if your trading account supports such trading. You can look for retracements. For example, an opportunity may exist when the market recovers or retraces, moving back up toward previous highs, at the 50% recovery level: that is a possible buy/long opportunity. Indeed, the January Effect can provide many buy opportunities throughout the year. We’ve covered this in previous annual videos.

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