January 2017 is almost here, so that means it’s time to review the January Effect to see what it can tell us about future market conditions. While there’s no way to truly know what will happen, John Paul has been using the January Effect to improve his trading for a long time. You can go back in history to review our previous videos and see what happened with this strategy. In this video, a couple of recent years are reviewed to show you exactly what to do to find trading opportunities.
The main rule to the January Effect is if January closes higher than the price at which it opened, the market is expected to have an up year. Let’s say January 2017 does in fact close higher than the price at which it opened. We can now follow the rules of the strategy, which say for every four or more days of pulling back (not making new highs), look for a retracement opportunity. John Paul uses NinjaTrader’s Fibonacci Retracements tool to draw a 0%, 50%, and 100% line in one shot. If you need help configuring this tool to only show the three percentages, click here for instructions. This represents the recent high and low as well as the value (50%) price needs to surpass to trigger the rule for a long entry. When price retraces through the 50%, it’s time to place a long trade to capture the bullish movement. Keep in mind, these moves often extend over multiple days. Holding a position that long requires a good amount of account funding, however, you can still take advantage of intraday movement.
If you want to hit the ground running in 2017 with a full bag of trading strategies, the best way to learn everything John Paul has to share with you is to take part in the upcoming Nov. 28 Group Mentorship class. Click here to enroll. By submitting the deposit, your seat will be saved and you’ll get the first week’s course to use ahead of time.