A1 Trading

Seasonality

Seasonality is essential for traders to consider as it provides valuable insights into recurring patterns and trends within markets, enabling them to anticipate potential price movements and make informed trading decisions.
WHAT IS SEASONALITY?
The Seasonality (Monthly) chart showcases the 5 year & 10 year historical month to month performance of each symbol.

If a particular symbol shows a +1.00% average gain in June, that would indicate that in the last 10 years, the average performance is a gain of 1% from the beginning of the month until the end of the month.
HOW CAN TRADERS USE THIS?
When reviewing historical performance, it is important to remember that past performance is not a guarantee of future performance. However, understanding how an asset typically performs historically can be useful in a trader's analysis.
For example, if the price of EURUSD tends to fall by 1% in March over the past 5 and 10 years, a trader could factor in this historical pattern to their analysis for possible setups.
Week of Year Trends for EURUSD
Month of Year Trends for DXY

How is the EdgeFinder's Seasonality Score Calculated?

Seasonality Calculation For Indices & Commodities

For indices and commodities, the EdgeFinder assigns a seasonality score of either -2 or +2.

If the current month's 10 year historical average performance is positive, the EdgeFinder assigns a +2 to the seasonality score. If the current month's 10 year historical average performance is negative, the EdgeFinder assigns a -2 to the seasonality score.

The reason this seasonality score weighting value is higher than for currency pairs, is that seasonal tendencies are very pronounced in indices & commodities.

This score is then factored in to the total score produced by the EdgeFinder.

Seasonality Calculation For Currency Pairs

For currency pairs, the EdgeFinder assigns a seasonality score of either -1 or +1.

If the current month's 10 year historical average performance is positive, the EdgeFinder assigns a +1 to the seasonality score. If the current month's 10 year historical average performance is negative, the EdgeFinder assigns a -1 to the seasonality score.
Frequently Asked Questions (FAQs)
View more FAQs here.

What time frames can you use the edgeFinder on?

The EdgeFinder gives directional bias and is not time based. Therefore, there is not a specific time frame that is best for the EdgeFinder.

What assets are included on the EdgeFinder?

Forex Majors:
AUDUSD, NZDUSD, USDZAR, GBPUSD, USDJPY, USDCAD, USDCHF, EURUSD

Forex Minors:
AUDCAD, AUDCHF, AUDJPY, AUDNZD, CADCHF, CADJPY, CHFJPY, EURAUD, EURCAD, EURCHF, EURGBP, EURJPY, EURNZD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, NZDCAD, NZDCHF, NZDJPY

Metals:
XAUUSD, PLATINUM, SILVER, COPPER

Energy:
USOIL

Indices:
GER30, US30, SPX500, US10Y, NAS100, JP225, UK100, RUSSELL

Bonds:
US10Y

Is the EdgeFinder realtime?

While the EdgeFinder is not necessarily realtime, it is fully automatic in its data collection. The EdgeFinder uses a variety of data sources and inputs. Most price data updates are on a 15 minute timer, while economic data updates every few hours. COT data updates weekly (as it only releases 1 time per week), and retail sentiment updates every 30 minutes.

Video Tutorials

How To Use Seasonality
How to Trade Seasonality like a PRO | Month of the Year Trends!
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A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
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There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
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