In my years of trading research with seasonality and cycles, I have fallen under the spell of various gurus. At the end of the day, each trading event is a unique event. I have followed some gurus who pounded the table and I lost when the market did what the market wanted to do...not what the famous guru insisted would occur. I decided I needed to dig into this rabbit hole myself.
I fell back on simple human behavior patterns in the market. Remember price is nothing more than the summation of human emotions assigning a value to an instrument. Seasonality is the study of repeating human behavior.
The Introduction to Seasonality Forecast report is designed to let you see behind the curtain of what "tends" to occur each year according to the calendar. Obviously, supply, demand, and geopolitical events can throw a wrench into the best of seasonal trading expectations as can central bank actions...we know this! One more time...in trading nothing is 100%. There are no absolutes!
Finally, let me share, in 2009, I was so proud to call the market turn in March based on technical analysis. It was years later, I saw the only reason the market rose was based on seasonality tendency.
I about fell out of my chair! How could I (or anyone) claim to have "timed" the start of a rally, when the real reason was forecast "in advance" by seasonal tendency? Here the technical analysis indicators simply lined up with known herd behavior.
Again, I ask...how could calendar dates call the end of the stock market drop associated with a financial crisis?
Simple!...you get enough humans doing the same thing and an action repeats with momentum. This is the basis of why seasonal tendency works humans following behavior patterns.
I think watching seasonal tendency harnesses the power of "herd" behavior and self-fulfilling prophesy. Is this an exact science? Of course not. Studying the seasonal tendency is simply another tool in your trader tool box! If you are a trend trading person, you will really appreciate the power of "herd" behavior known "in advance."
I am determined to help make the trading business easier to learn. Trading is a rough business to master so the goal is presenting higher probability techniques in everything I share with clients.
With the Introduction to Seasonality Forecasting, report, I am taking the approach "seeing is believing and pictures are proof."
I find most seasonality studies are statistics intensive. Such reports might count a seasonal event as working, even if the position trader would have entered and exit in a single day or two. Alternatively, if the trade made as little as $100 (or less), the trade is counted as a positive statistic. I do not agree with this approach.
I want to know...could a normal trader realistically have made the trade and prospered?
Another useless statistic is how much a seasonal trade would have made over the last 20 or more years. Really? This kind of number glosses over the idea every year is a unique event and we must look at fundamentals with cursory glance and our analysis tools. This number also is likely not based on actual trades taken, but a computer search of best possible out-come.
I also do not agree on entering a trade on an exact certain date. Trading is not absolute or precise! A trader should use seasonality as a back drop of what "tends" to occur. We look at the exact date I provide, yet we are flexible knowing the trade might start a little earlier or a little later. Yes, sometimes the trade will emerge on the exact date I provide...but we are flexible and look at seasonality as providing us with a window of opportunity.
You have other technical indicators for specific entry beyond the scope of seasonality. You are also a discretionary trader. When you see normal seasonal tendency line up with your technical analysis, it is similar to wind filling the sail for your trade...especially trend trading.
Chart readers are visual traders. We want to view the chart with a comfortable feeling, based on history, finding a trade signaled with seasonal tendency we believe actually stands a good probability of seeing follow-through...yet knowing nothing in trading is 100%!
While we know every year should be an unique trading event for a given instrument...what we find with seasonality is repeating patterns. If an action repeats, we can trade it. Nothing is 100%, but wait until you see the charts, like the Japanese Yen shown here.
The Introduction to Seasonal Forecasting report is an approachable tool providing you with a visual road map price frequently travels. We then take this same information applying to the monthly reports on futures and stock market strategies. The report IS NOT filled with tables of statistics. You are provided charts going back in time showing visually if the seasonal tendency worked or not. Remember every single year is a unique event so nothing is 100%. It is imperative you use seasonal tendency as another tool rather than exclusively placing trades according to a date provided.
Remember futures trading and trading options is not a suitable investment for all. Please consult a licensed professional prior to trading with any real money. Past results do not guarantee future results. For more information on our disclaimer, please visit the Services page here.
Helping Traders Learn to Trade
Market Research / Trader
Student of the market since explaining stock tables as a class project in high school. Have traded stock market strategies, ETFs, options, and futures; both swing and day trading. Taught on-line and in person at trading industry events. Formed an auto-trading group diving in deep with statistics. Started Hit the Mark Trading, LLC in 2008 with the goal of helping people learn to trade focusing on trend and momentum. Strong advocate of paper trading to learn all new concepts regardless of your level of expertise.
I have used Trade Navigator over 10 years and am thrilled with the ease of use, simplicity, and powerful charting tools. My interpretations are drawn from the seasonality tool.
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