FX Trading Revolution | Your Free Independent Forex Source
  • Home
  • TOP FX Indicators
  • NEWS
  • Trading Room
  • Brokers Truth
  • REAL Brokers Reviews
  • KNOW-HOW

Seasonal Patterns and Forex Trading

4/28/2017

0 Comments

 
While most forex traders use either technical or fundamental analysis as their primary trading guide, seasonality may also be very useful for trading analysis.

​Seasonality trading is based on the concept that throughout each calendar year, the forex market tends to move according to certain patterns at different times during the year.
Picture
If several years of data are examined, it is usually established that the forex market tends to move in fairly predictable patterns.
​For example, it has been shown that the month of September tends to be a month of high volatility in the forex market. This means that September tends to be one of the more lucrative months for forex traders who are aiming on high volatility periods by trading for example breakout strategies.
EURUSD Seasonality Trading
In the chart above, we highlighted months of September. Only two out of ten months were Inside Bars. Others tend to show a high volatility periods.

These seasonality patterns present profit making opportunities for traders. Although it is not advisable to trade solely based on seasonality patterns, it is advantageous to use seasonality to confirm what technical or fundamental analysis indicators are pointing to.

Since the forex market does tend to move in certain ways at certain times of the year, it is possible to increase profitability by incorporating seasonality patterns into your forex trading strategies. Here are a few examples of how seasonality has affected the forex market in previous years.

EUR/USD Seasonal Patterns:

​January tends to be a negative month for the EUR/USD currency pair. Lots of foreign currency is usually sent overseas for investment purposes at the beginning of every year with the main aim of initiating new positions.

Since the US dollar is among the most liquid currencies in the world, lots of new investment placements are made in the US at the beginning of the year. This usually leads to a rally of the USD in January. Studies indicate that in 80% of cases, this is exactly what has happened with the EUR/USD currency pair during the month of January.

​By mid-February, the EUR/USD tends to bottom, moving higher during March and rallying again by the end of April. More bottoming tends to take place during the month of June and August tends to be the worst month for the Euro.
EURUSD Chart - Forex Seasonal Patterns Trading

GBP/USD Seasonal Patterns:

With the GBP/USD, there is a tendency to bottom in the month of March, then move higher into the month of April. Like you can see in the chart below, in all cases (8 out of 8), there was a bullish candle after the month of March. There is also a tendency that GBPUSD is moving higher into August when it peaks.
GBPUSD March Bottoming - Seasonal Pattern Forex Trading

USD/CAD Seasonal Patterns:

USDCAD currency pair tends to rise in the beginning of each year. Then USDCAD topping by the end of February can be usually seen, and bearish sentiment usually takes place until the beginning of June. August is usually a peak for USDCAD, and USDCAD tends to decline into September. 
USDCAD Seasonal Forex Trading Patterns

Conclusion

​Based on these observances, it is clear that seasonality does seem to play a role in how the forex market moves. If traders can identify these patterns, they should be able to benefit from them and to make more lucrative trades. ​​However, remember that a further confirmation by a technical analysis always adds some extra probability points to the seasonal patterns trading.

​​​​​​Related education and FX know-how:

0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Trusted FX Brokers

    Picture
    Picture
    Picture
    Picture

    Categories

    All
    Forex Basics
    Forex Brokers
    Forex Indicators
    Forex Money Management
    Forex Psychology
    Forex Trading Systems
    Forex Trading Tips
    Fundamental Analysis
    MetaTrader 4 Tutorials
    Price Action
    Successful Forex Traders
    Technical Analysis

    RSS Feed

Free MACD-BB Fuse Indicator, Click Here!
True Interbank FOREX Trading!
Up to $5000 bonus, FCA regulated FX Broker!
FREE Trading Signals, 91% Success!
New exclusive Purple Bands indicator for FREE!
FX Trading Revolution Logo

Your free independent Forex Source

Picture

NEW YORK

Picture

LONDON

Picture

TOKYO

Picture

SYDNEY


Content of FX Trading Revolution

Forex Education - Basics:

  • What is FOREX?
  • What Is Forex Trading?
  • History of Forex
  • Forex Market Growth Factors
  • ​Forex Trading Basics that You Must Know
  • Forex Trading Hours
  • Currency Pairs
  • Exchange Rate Systems and Currency Valuations
  • Participants of Forex Market
  • Introduction to Different Investment Options for Trade the Financial Markets
  • Introduction to Trading Instruments: FOREX, Shares, Commodities, Indices, Bonds, ETFs and Others
  • Insider Information about Interbank Trading​
  • What is a Forex spread?
  • ​What is a Forex Pip?
  • Forex Leverage
  • How to Make Smart Use of Leverage in Forex Trading
  • Forex Margin and Margin Call
  • Forex Rollover and Swap
  • Different Types of Forex Orders Explained
  • How the Prices on Forex are Created and Why They Move?
  • The Best and Most Successful Forex Traders
  • ​The Habits of Successful Forex Traders
  • How to Build Your Own Forex Trading System
  • 3 Winning Steps for a Successful Trading Journey
  • Forex Trading Plan
  • Researching the Forex Market
  • Using Stop Loss & Take Profit in the Forex Market
  • Forex Demo Account vs. Real Account
  • Forex Trading Platform
  • Why is Backtesting Important for any Forex Trader?
  • How much should I start with to trade Forex?

Forex Education - FX Brokers:

  • Types of Forex Brokers and True Comparison
  • ​What Forex Brokers Never Want You to Know!
  • Truth about Forex Brokers
  • Regulation in Forex Trading
  • Dirty Practices of Forex Brokers that Cost You Profits
  • How to Choose the Best Forex Broker
  • How Do Forex Market Makers Work?
  • The Hard Reality How the Vast Majority of ECN and STP Brokers Work
  • Hidden, Yet Regular Forex Trading Costs
  • Regulation on Forex, what does it mean for brokers, IBs and strategy providers?

Forex Education - Technical Analysis:

  • Technical Analysis Introduction
  • Forex Trend Definition
  • Moving Average Basics
  • Forex Trading with ​Commodity Channel Index (CCI)
  • Forex Trading with ​Relative Strength Index (RSI)
  • Forex Trading with ​MACD
  • Parabolic SAR: The Stop and Reversal Forex System
  • How Average True Range (ATR) Indicator Can Make You a Better Trader
  • Utilizing Momentum Indicator the Right Way
  • Stochastic Oscillator: Simplifying the Useful Indicator for Forex Trading
  • Getting Your Way Around the Ichimoku Kinko Hyo Indicator
  • Unveil the Amazing Story Behind Bollinger Bands
  • Trading Divergences of Forex Indicators
  • Explore the Average Directional Index (ADX) Indicator
  • The Awesome Oscillator and its Role to the Forex Trading
  • What Can Accumulation Distribution Indicator Do in Trading?
  • Why Traders need to Understand the Twist and Turns of Standard Deviation
  • Be a Forex Expert and Apply the On Balance Volume Indicator on Your Next Trade!
  • Trading Overbought and Oversold Levels with the Williams %R indicator
  • The Breakdown of MFI: Money Flow Index
  • Heiken Ashi Charts
  • How many indicators should I use on my charts? Why less is more!
    ​
  • Price Action Trading – Most Adaptable Method​
  • Support and Resistance Trading
  • How Fibonacci Retracement is Used in Forex Trading
  • Forex Trading with Pin Bar Pattern
  • Outside Bar: An Effective Forex Trading Pattern
  • The Most Used Candlestick Patterns
  • Price Action Trading: Tips to Profit from the Forex Market
  • How To Place Stop Loss Orders Correctly
  • How To Place Profit Targets Like A Professional
  • ​Range Trading Versus Trend Following
  • ​The Psychology Behind Round Numbers and Support Resistance Levels in FX Trading​
  • Forex Breakout Trading Strategies
  • Forex Chart Patterns
  • Dow Theory and Forex Trading
  • Price Action Reading in the Forex Market
  • Pivot Points in FOREX Trading
  • Pivot Points in Forex trading - The 70-80% rule (part 1)
  • Pivot Points in Forex trading – Market sentiment and support/resistance (Part 2)
  • Volatility in the Forex Market
  • Trend trading the Forex market
  • Trend Trading vs Range Trading - Which one to choose, how to combine them?

  • Introduction to Harmonic Trading and the ABCD Pattern
  • The Gartley and Butterfly Harmonic Patterns
  • The Bat and the Crab Harmonic Patterns
  • Elliott Wave Principle Introduction
  • Counting Elliott Waves and Types of Waves
  • Practical Application of the Elliott Wave Principle

  • Analyzing and Trading Cross Currency Pairs - Introduction
  • Analyzing and Trading Cross Currency Pairs – Part 2
  • Analyzing and Trading Cross Currency Pairs – Part 3
  • Analyzing and Trading Cross Currency Pairs – Part 4
  • Analyzing and Trading Cross Currency Pairs – Part 5

Free Forex eBooks:

  • Insider Forex Strategies by FX Trading Revolution

Forex Interbank Trading:

  • Forex Interbank Market Section
  • Forex Interbank Market Explained
  • ​How to Select a Prime Brokerage and Their Role
  • Liquidity Provider Definition
  • High Frequency Trading (HFT) Explained
  • ​What is Algorithmic Trading?
  • Integral FX Inside Trading Platform
  • Currenex: The Best Foreign Exchange Aggregator for Traders
  • Liquid X Trading Platform
  • HotSpot FX ECN
  • FIX Protocol - Financial Information Exchange
  • What is Forex VPS?
  • Forex Scalping Explained
  • The Rise of Foreign Exchange Aggregators in the Trading Industry

Forex Education - Money Management:

  • The Complete Forex Money Management Guide
  • Professional Forex Risk Management
  • 8 Tips How To Manage Risks in FX Trading like a Pro
  • Money Management in FOREX: Adding to Winners and Trimming Down Losers in Trend Trading

Forex Education - Psychology:

  • The Complete Guide to Forex Trading Psychology
  • Forex Trading Psychology Basics
  • Forex Psychology: Developing a Successful Forex Mindset
  • The Forex Psychology and Traders’ Comfort Zone
  • Psychology Behind Following a Forex Trading System
  • Importance of Being a Disciplined Trader in the Forex Trading
  • Avoiding Forex Trading Systems Pitfalls
  • Forex Trading Psychology: The Borderline Between a Trading Plan and Emotional Outbursts
  • Developing the Psychology of a Successful Trader
  • Most Traders Fail! Find out the 4 Stages of Mastering Forex Trading!
  • Forex Trading Personality Types
  • The Accurate Forex Trader
  • The Administrative Forex Trader
  • The Adventurous Forex Trader
  • The Artistic Forex Trader
  • The Detailed Forex Trader
  • The Facilitative Forex Trader
  • The Fun-Loving Forex Trader
  • The Independent Forex Trader
  • The Innovative Forex Trader
  • The Planning Forex Trader
  • The Socially Responsible Forex Trader
  • The Spontaneous Forex Trader
  • The Strategic Forex Trader
  • The Supportive Forex Trader
  • The Values-Driven Forex Trader

Forex Education - Others:

  • ​Forex Blog - all educational articles
  • Forex Fundamental Analysis Basics
  • Fundamental Analysis and Trading the Forex Market Using Fundamentals
  • Nominal vs. Real Exchange Rates
  • Euro & Currency Integration
  • Interventions of Central Banks in the Forex Market
  • Seasonal Patterns and Forex Trading
  • Correlation Forex Trading
  • Correlation Between Commodities and Forex
  • How to use the correlation indicator for MetaTrader 4
  • The Most Profitable Forex Trading Strategies
  • The Four Steps to Begin Forex Trading Profitably
  • MetaTrader 4 Introduction
  • How to Install EA, Indicator or Script to the MT4 (Windows & MAC)
  • MetaTrader 5 Introduction
  • cTrader: Advanced Platform for ECN / STP FX Trading​
  • Benefits of Forex Segregated Trading Accounts
  • How to Trade Forex Like the Big Institutions
  • Carry Trading in Forex
  • Forex News Trading
  • Trading Fundamentals – Differentiating between important and noise events. How misleading stories create abnormal price moves?
  • Forex Sentiment Analysis
  • FOREX Inter-Market Analysis
  • What is Slippage in FOREX and How to Avoid Trading Losses
  • How Forex Traders Can Benefit from Price Shading
  • FOREX Depth of Market, an Useful Tool for Forex Traders
  • Forex Hedging Explained
  • Forex Trading and Taxes
  • Forex White Label Explained

Forex Investing:

  • PAMM: Exclusive Opportunity for Investors and Successful Traders
  • PAMM Managed Accounts Invasion of Forex Trading

Forex Indicators:

  • High Frequency Trading Signals Indicator
  • Support Resistance Indicator
  • Correlation indicator
  • Overbought Oversold Indicator
  • Forex Spread Indicator
  • CCI indicator
  • RSI indicator
  • Market Profile Indicator​
  • Forex Sentiment Indicator
  • The Best MACD Indicator
  • Pivot Point Extra Indicator
  • How updates of our indicators work?

Forex Tools:

  • Daily Forex Analysis
  • Live Forex Charts
  • Breaking Forex News
  • Live Euro to Dollar Exchange Rate and Chart
  • Live Pound to Dollar Exchange Rate and Chart
  • Live Dollar to Yen Exchange Rate and Chart
  • Live Aud to Usd Exchange Rate and Chart
  • Live Usd to Chf Exchange Rate and Chart
  • Real time Forex Rates and Currency Heat Map
  • FOREX Economic Calendar
  • Currency Converter
  • Forex Pip Calculator

Forex Trading Strategies:

  • 4 Hour Chart Trend Following Strategy
  • Trading the Gap Forex Trading Strategy
  • Inside Bar Forex Trading Strategy
  • Forex Breakout Confirmation Strategy
  • Trendline Reversal Forex Trading Strategy​
  • MACD Trend Forex Trading Strategy
  • Double Bollinger Band, MACD, Stochastic Crossover Forex Strategy
  • Trend Trading with the ADX and the Parabolic SAR
  • Trading the Flag and the Wedge Chart Patterns
  • Pullback Forex Trading Strategy
  • The Triangle Pattern Trading System
  • Head and Shoulder, Double Top and Double Bottom Chart Patterns Strategy
  • Rounding and Triple Tops and Bottoms
  • London Session Forex Breakout Strategy
  • Range trading the Forex market
  • Larry Williams OOPS Trading Strategy
  • Master Candle Trading Strategy
  • High Probability Tall Candle Reversal Forex Strategy
  • Increase Profits by Analyzing Multiple Timeframes to Confirm Trading Signals
  • Range Trading with the ADX and Bollinger Bands

Forex Brokers Reviews:

  • Forex Brokers Introduced
  • Real Forex Brokers Reviews
  • Purple Trading Review
  • Pepperstone Review
  • Orbex Review
  • FPMarkets Review
  • LCG Review
  • FXPro Review
  • HYCM Review
  • XM Review
  • AvaTrade Review
  • ​Axiory Review
  • LMAX Review
  • ​FXopen Review
  • Think Markets Review
  • CMC Markets Review
  • Swissquote Review
  • IC Markets Review
  • OctaFX Review
  • Dukascopy Review
  • Trader.Online Review

Cryptocurrencies:

  • What is cryptocurrency?
  • Trading cryptocurrency
  • Cryptocurrency mining
  • What is blockchain?
  • Bitcoin introduction
  • Ethereum introduction
  • Litecoin introduction
  • Ripple introduction
  • Zcash introduction

Other trading tools:

  • Live charts of Stocks, Futures, Commodities and Stock Indices
  • Real Time Gold Price and Chart
  • Real Time Brent Crude Oil Price and Chart
  • Real Time Dow Jones Index Rate and Chart
  • Real Time S&P 500 Index Rate and Chart
  • Real Time DAX 30 Index Rate and Chart
  • Real Time FTSE 100 Index Rate and Chart
Copyright © 2015 - 2018 Trading Revolution Inc. All Rights Reserved. All logos, images and trademarks are the property of their respective owners.

High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Any opinions, news, research, predictions, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Contact us  |  About us  |  Guest blogging  |  Terms Of Service & Privacy Policy  |  Advertise
  • Home
  • TOP FX Indicators
  • NEWS
  • Trading Room
  • Brokers Truth
  • REAL Brokers Reviews
  • KNOW-HOW
✕