At first glance this analysis looked to be fairly straight forward as the hard data reveal December to slightly under perform vs. the previous month, however, the risk vs. reward chart paints an entirely different story.
December's historical data show slightly fewer trades, a marginally lower winning history, and basically the same average return as November. Both of these months are fairly average when compared to the strategy as a whole, however, December looks much stronger than November when comparing the risk vs. reward to the strategy as a whole. Notice (see chart below) that the success rate for returns in the lower end of our target range (30%) are actually slightly higher than the strategy overall which is the average of all months.
We hesitate to discuss matters other than the pure statistics here as that is outside of the scope of these posts, however, it seems relevant to point out the history for this strategy as we come to a close for the year.
For 2018 the monthly strategy has been successful for some or all of our picks for every month save for November. Members who stayed in October rather than selling early ended up making excellent returns despite the incredibly eroded option pricing on Monday and Tuesday of our week that month. Since we called to exit prematurely in October, we recorded results as losses (they were at the time of the exit alert).
Where does this leave us? Somewhat optimistic. Note the average winning history for the strategy for the year is sitting at around 81%. Historically however, the strategy has maintained around an 85% winning history for 20 years (and counting).
As always, adhere to our target guidelines and book profits ASAP to mitigate risk.
