On the hunt for a free trading method you can use today? Look no further. This method proves to be powerful year after year. We could actually charge for it, but sometimes it’s just nice to give something of quality away for free!
So, this trading method/idea consists of two parts. First, you have to figure out whether the current year that you’re trading is an “up year” or not. To figure that out, you use something called the January Effect. The January Effect says that if the month of January closes higher than it opens, the year will also be an up year. If you look at the E-mini S&P 500 (ES) for the month of January, 2020, you will see that the month closed higher than it opened. The January Effect says that we can expect price to rise higher by the end of the year in December.
Got it? Well, it won’t be until the end of January of 2021 that you will know whether 2021 is expected to be an up year. Keep that in mind for the future. Surely, DayTradeToWin will make another trading video or post about that when and if it happens.
So, we’re presently working with the remainder of 2020. And by now, you understand that price is expected to go higher. Maybe we’ve plateaued. Or maybe there are still buying (long) opportunities we can hold for multiple days while price trudges to greater heights. The video shows how such heights and small falls have occurred repeatedly throughout 2020 thus far. That leads us to the next important aspect of this free trading method: where to find the entry opportunities.
You see, when price drops, it automatically establishes a recent high. During an assumed multi-day recovery where price retraces to its prior high, we can wait until the halfway recover point. At that 50% level, we can wait until multiple closing candles occur. This “tells us” that price is likely ready to continue higher. We then buy the market and hold on to the trade until nearing the last high. Please refer to the video, as this is just a basic summary.