Seasonal spreads on the Forex?

[wheaters]

Morning,

I'm interested in trading the seasonal spreads on currencies; I'm not a futures trader, so can't get involved in the usual spreads of related contracts or close months.

Does anyone out there have some ideas on how to go about trading seasonal spreads on the forex alone?

Many thanks,

Dave

p.s., the flag shows me as a Yank, but I'm a Brit.

Dave

 

[tommog]

firstly there arent really spreads in the conventional sense in FX because each contract is already a spread. i.e if you are long Eur/USD you are simultaneously long euros whilst short dollars. A lot of newbies seem to think they have stumbled across something when they think they can spread eur/usd against gbp/usd for example, this is a complete mistake. If you buy eur/usd sell gbp/usd you are just long eur/gbp. It is not a spread.

Regarding seasonals this doesnt apply to FX either. A "season" in trading is how you understand a season, winter, summer etc etc. The time of year has no bearing on the FX market and if there are any correlations they certainly arent strong enough to be tradeable. Seasonal trades are usually used in non financial products such as commodities. For example Heating Oil usually trades at a premium in the winter because it is colder so more people buy heating oil in these times. Wheat is more abundant in the summer so there is a lot of supply and "may" generally trade at a discount to other months.

But regarding sseasonal spreading in FX doesnt exist im afraid.

 

[wheaters]

firstly there arent really spreads in the conventional sense in FX because each contract is already a spread. i.e if you are long Eur/USD you are simultaneously long euros whilst short dollars. A lot of newbies seem to think they have stumbled across something when they think they can spread eur/usd against gbp/usd for example, this is a complete mistake. If you buy eur/usd sell gbp/usd you are just long eur/gbp. It is not a spread.

Regarding seasonals this doesnt apply to FX either. A "season" in trading is how you understand a season, winter, summer etc etc. The time of year has no bearing on the FX market and if there are any correlations they certainly arent strong enough to be tradeable. Seasonal trades are usually used in non financial products such as commodities. For example Heating Oil usually trades at a premium in the winter because it is colder so more people buy heating oil in these times. Wheat is more abundant in the summer so there is a lot of supply and "may" generally trade at a discount to other months.

But regarding sseasonal spreading in FX doesnt exist im afraid.

Bummer. Thanks, Tommog.

 

[Rhody Trader]

Regarding seasonals this doesnt apply to FX either. A "season" in trading is how you understand a season, winter, summer etc etc. The time of year has no bearing on the FX market and if there are any correlations they certainly arent strong enough to be tradeable. Seasonal trades are usually used in non financial products such as commodities. For example Heating Oil usually trades at a premium in the winter because it is colder so more people buy heating oil in these times. Wheat is more abundant in the summer so there is a lot of supply and "may" generally trade at a discount to other months.

But regarding sseasonal spreading in FX doesnt exist im afraid.

I'm going to have to disagree with you there. My research indicates that there are indeed "seasonal" patterns in forex. Call them "calendar" patterns if you prefer.

 

[PipStar]

I'm going to have to disagree with you there. My research indicates that there are indeed "seasonal" patterns in forex. Call them "calendar" patterns if you prefer.

Well and good. But it would be useful if you could give us all some actual examples to illustrate your point. Thanks.

 

[Rhody Trader]

The EUR tends to perform badly in January. Can't remember if it's in general, or just EUR/USD, though. Don't have the info in front of me at the moment. What causes that I don't know, but it seems likely to have to do with the corporate accounting cycle and cashflows related to it.

 

[abbeyandriana]

I think Oil is more cyclical than seasonal, and geopolitical. We have huge supplies of oil and growing each week. And a rising unemployment rate.

 

[justtradin]

I think Oil is more cyclical than seasonal, and geopolitical. We have huge supplies of oil and growing each week. And a rising unemployment rate.

Notwithstanding geopolitical occurences and hurricane forces, I expect crude to decline to $62-65 in the next month. If we see follow through to the downside on Monday, that level could be reached in short order.Something feels very strange about these markets.

 

[justtradin]

I think Oil is more cyclical than seasonal, and geopolitical. We have huge supplies of oil and growing each week. And a rising unemployment rate.

Notwithstanding geopolitical occurences and hurricane forces, I expect crude to decline to $62-65 in the next month. If we see follow through to the downside on Monday, that level could be reached in short order.Something feels very strange about these markets.