Why we use a 15-year seasonal pattern for trading spreads
Much seasonally based information conforms to random probability generated data. Avoid trading seasonally based information without a fifteen year pattern, a minimum 80% win probability, profits twice losses, and a price action based entry. Price based trading information is superior to seasonal based information, because a trend or swing can be established before entry. Seasonal trades with less than ten years data are not worth much, but can be used with adequate priced entries and money management. Seasonal studies with less than 20 occurrences have little value without a precise price action entry method. That is why at Trading Educators we use the Law of Charts™ and the Traders Trick™ to give us our precise price action entry. Never use time based entries with fixed dollar risks. To buy an S&P futures contract because it is July 5th, the most bullish annual stock market day with a 1.2% increase, without a price action based entry is financially self-destructive. Seasonally based information may be more accurately applicable to agricultural commodities, than financially based commodities, due to crop planting and harvesting times of year.