The clock has ticked over, and we're at the beginning of a new year. And we all know what that means…

It's resolution time.

One of my resolutions for 2020 is to reduce risk. Not that we've ignored risk previously… But risk should always be at the forefront — the primary consideration when implementing any strategy. 

Over the next few weeks, I want to answer some questions about risk, including how I think about risk and how it affects the way we trade.

Today, I want to make you aware of the risks of winning.

In my Income Trader service, we consistently win on more than 90% of our trades. If you've been with me for some time, you know we've maintained that level of performance for more than six years. Now, I will never be complacent. My followers place their trust in me, and I take that very seriously. I spend a great deal of time looking for ways to reduce risk even more, which is why I'm doing that now.

This brings me to an important point. The market just wrapped up an impressive year. And if you were in it, chances are you made some good money.

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However, after a long winning streak, some people have a tendency to start placing all their eggs in one basket. They may allocate too much capital to an individual trade.

And whether you're one of my premium subscribers or not, I want to urge you to avoid this. 

One way to reduce this risk is to assume each trade will be a loss and allocate capital accordingly. This will reduce the chance of a single trade creating problems.

I'm also making another resolution to my Income Trader readers… I'm going to do everything I can to provide several trades each week. That way, there will be plenty of opportunities to profit. And hopefully, that will reduce the temptation to take on too much risk.

But when market conditions warrant, I'm going to let off the accelerator.

Occasionally, there will be times when I can't find any trades. This is part of any good risk management philosophy. I will not loosen my requirements for a trade just because… When there are no options that meet my requirements for safety, I will not make a trade – and I'll tell my readers why.

My First Trade Of 2020

Speaking of resolutions, probably the most popular one people make is to get into better shape. We all know gym memberships soar around this time of year. It's probably the easiest seasonal trend to spot other than the holiday shopping season.

But what you may not know is that this also leads to a seasonal trend in one of my favorite trade targets: Lululemon (Nasdaq: LULU).

For many people, Lululemon is a store they visit (either in person or online) before they go to the gym. It's easily one of the most popular apparel makers among affluent consumers, and this seems to explain the stock's seasonal trend. We see the same trend in the company’s fundamentals. Sales are always strongest in the quarter than ends in January.

There's an interesting seasonal pattern in LULU's chart, too. See below…

The seasonal trend is shown as the solid blue line. The dashed black line on the left is the recent price action in LULU, and the vertical black line marks today.

I calculated the seasonal trend by detrending the data and averaging the price changes on each trading day since LULU began trading in 2007. It's interesting that LULU shows a tendency to move higher at the beginning of the year. News risk is low too, since earnings are expected at the end of March.

Action To Take

This all means that risk is lower than usual for a trade in LULU. Fundamentals are strong, and seasonals are interesting — but I would never recommend a trade based solely on that. Fortunately, the stock is also on a "buy" signal according to my award-winning Income Trader Volatility (ITV) indicator. 

This is the same indicator that’s helped deliver winning trades more than 90% of the time for us over at my premium Income Trader service.

If you're looking for a low-risk way to generate more income from your trades in 2020, then you owe it to yourself to learn more. We just finished wrapping up our groundbreaking Income Millionaire Project and have a handful of slots remaining. So there's never been a better time to try…

The goal of this program is simple: Show 1,000 regular investors how to generate $1 million in retirement income. Each. Go here to get the details now.