The January Effect observes that small-cap stocks often outperform early in the year, possibly due to tax-loss selling in December.
Traders attempt to capture this tendency by buying in late December and selling after the first few weeks of January.
The strategy follows that schedule, entering near year-end and exiting mid-January.
A stop-loss ensures losses stay manageable if the effect fails to appear.
Entry Criteria: calendar effect triggers
Long/Short: Both
Exit Criteria: stop-loss or opposite signal
Stops: Yes, percent based
Default Values:
CandleType = 15 minute
StopLoss = 2%
[*]Filters:
Category: Seasonality
Direction: Both
Indicators: Seasonality
Stops: Yes
Complexity: Intermediate
Timeframe: Intraday
Seasonality: Yes
Neural networks: No
Divergence: No
Risk level: Medium