Dear Investor,
Firstly, I would like to report that Tea Muratovic and I were invited to speak in New York at the end of April at the 50th Symposium of CMT. CMT is the international umbrella organization of professional technical analysts, and we attended as Seasonax speakers on the topic of “Seasonality”.
Speakers also included Larry Williams, John Bollinger, Ralf Acampora, Tom DeMark, Robert Prechter and Martin J. Pring – just to name a few. Their indicators, such as Williams %R, Bollinger bands or Pring’s KST, can be found in virtually every charting software today.
Speaking alongside these pioneers of technical analysis was a great honor for us. We take it as a challenge to continue making Seasonax beneficial and professional for you in the future!
5 ways you can improve your yields with seasonality
The presentation reminded me of the importance of information about investment practices. When I talked about what basic methods there are for using seasonality, I looked into the curious eyes of many listeners.
Therefore, I would like to mention these methods to you as well. The following are five ways that you can use seasonality in investing and trading:
1. Direct Trading: Seasonal patterns can of course be traded directly. For example, you can go long during the year-end rally. With this method, make sure that the individual investment is not too large and that stop lots are used.
2. Timing: Seasonal patterns can be used for timing. For example, you can buy stocks in November at the beginning of the fall rally, rather than at its end in early January. With this method investors, whose investment horizon is longer than a seasonal pattern, can also take advantage of seasonality by optimizing entry and exit times.
3. Filter: Conversely, investors who are very short-term orientated can also use patterns of longer duration. This is done by using seasonal patterns as a filter. For example, day traders cannot enter a position if the seasonality is negative. The number of trades is reduced in this way, but the probability of winning is increased. Larry Williams uses this method regularly.
4. Additional Input: You can also use seasonality as an additional input factor to your existing trading approach – no matter if it belongs to fundamental or technical analysis. For example, if you trade your stocks with a trend following approach together with a fundamental filter, you can simply add the seasonal trend as an additional decision criterion. Since seasonality has its basis in the calendar, while other trading approaches do not, you can in this way link non-correlated signals. This increases the probability of a positive trade.
5. Selection: With this approach, you review your portfolio at regular intervals of, say, one month. You then invest in the stocks or commodities that have particularly good seasonality in the coming weeks. After a month, you repeat this process, selling the stocks that are no longer seasonally interesting and rolling into the more interesting ones. For this approach, the screener in Seasonax is particularly helpful.
Use seasonality in the way that suits you!
Just pick the one that works for you from these five methods! We designed Seasonax so you don’t have to spend a lot of time to make seasonality work for you.
No matter if you continue to use your existing trading approaches, or if you just hit with seasonality, www.seasonax.com offers you the necessary tools for that!
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Originally Posted May 9, 2023 – The 5 Ways to Use Seasonality when Investing
Disclosure: Seasonax
Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. Seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. Seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by Seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. Seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
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