January 2024 Monthly Options Analysis

Ranking vs Overall

Last place for both metrics vs. strategy overall.

Risk vs Reward

Vastly underperforms.

Successful Picks

Several picks to choose from.

Trade History

Performance for this month seems to have reached peak. Upshot is consistency.

Analysis

Overall Performance in January:

• January is a challenging month with a generally lower success rate and average return compared to the overall monthly averages across all months.
• Trades targeting a 30%-50% return range have a reduced success rate in January compared to the overall average, suggesting higher risk during this month.

Stock Selection:

• WYNN and GOOG stand out as top performers in January, both in terms of winning history and average return. WYNN shows a 100% winning history with an average return of 125%, and GOOG has an 86% winning history with a 143% average return.
• AAPL and BIDU also demonstrate strong performances with high success rates and solid average returns.

Target Return Range:

• Although the overall success rate decreases as the sought return increases, focusing on the 30%-50% range is still viable, especially with specific stocks.
• Given the data, aiming for the lower end of this range (around 30%) might be more prudent to balance the risk and potential for success.

Risk Management:

• Due to the variability and generally lower success rates in January, it’s crucial to adopt stringent risk management strategies.
• Consider reducing position sizes or employing protective measures like stop-loss orders to manage potential downside.

Diversification:

• Diversifying across several of the better-performing stocks (like WYNN, GOOG, AAPL, BIDU) could help mitigate risks associated with individual stock performance.

Recommendations for Trading in January:

• Focus on High-Performing Stocks: Prioritize trades in WYNN, GOOG, AAPL, and BIDU, as they have shown relatively higher success rates and returns in January.
• Target Lower Range for Returns: Aim for the lower end of the 30%-50% return range to balance the increased risk seen in January.
• Apply Cautious Position Sizing: Given the overall lower success rates in January, consider reducing the size of trades to manage risk exposure.
• Implement Protective Measures: Utilize stop-loss orders or other risk management tools to safeguard against significant losses.
• Diversify Trades: Spread your trades across several of the better-performing stocks to reduce the risk associated with reliance on a single stock.

By following these recommendations, traders can better navigate the challenging market conditions typically seen in January while still aiming for profitable opportunities within the 30%-50% return range.