Sorry to ask, but how do seasonal market trends work? What do we have to do? Like right now, we just had the spring season. How does it affect the market? Appreciate your comments.
I really don’t think it’s to do with the weather as such, more to do with the fact that at certain times of year certain events take place that affects the market.
Take gold seasonality, for example, gold makes a bottom in July or August - this coincides with Indian wedding season which sees lots of gold buying.
Then we start to see traders in the west come back from their holidays they will adding gold to their portfolios in September.
A little buying at Xmas, followed by February lunar new year in the Far East with lots of gold buying - things then go quieter in the gold market.
You’ve heard of the Santa Claus rally? Well, that final week before Xmas is good for stocks. This is also known as a seasonal pattern.
In the agricultural commodities, there is seasonality too, and then there is the US driving season, which is often bullish for oil and nat gas.
Hurricane season, also good for natural gas, and winter of course.
I am sure there are many other examples of seasonality in the market - as for currency seasonality, I would imagine the commodity currencies show strong seasonality, the likes of the GBP not so much.
Cycles or seasonality are all quite similar and there are also cycles when it comes to US politics, such as the four-year presidential cycle.
I was not aware of such a phenomenon. Thank you for explaining it so well. And @Coeling thank you for posting this question.
Pull up a chart
Switch to weekly
Go back at least 7-10 years
Mark off the quarterly seasons
And try to find a pattern
There’s your answer
Wow, thanks for your detailed explanation. I really appreciate it. How long have you been trading. These things are unfamiliar to me. I guess I still have a lot of learning to do. But all the things that you mentioned make sense. I think I get the idea.
Thanks. I’ll do this as well. I appreciate all your comments.
Hi. I’ve been reading articles about stocks and seasons, so I might learn a thing or two. Here’s what I recently read https://learn.tradimo.com/advanced-stock-trading/how-seasonsa-holidays-affect-stocks