Seasonality is interesting to me because it seems like a powerful tool. However, just as you have mentioned that intermarket correlations are great until they don't work anymore, seasonality only isolates a few variables (like weather to some degree, holidays, fund flows, etc), but it does not take into consideration geopolitical and current context, let alone other factors. Clearly you do not feel it's something to blindly follow, but isn't a bearish January for the Euro based on the last 14 years as (ir)relevant as the relationship between stocks and bonds during a certain time period, etc.? If I could ask it this way: how much weight do you put into seasonality, as an actual support decision tool? If you had convincing reasons to be bullish Euro, and the past data of bearish seasonality conflicted with it, what would you do?
Last edited by josh; January 7th, 2014 at 07:40 PM.
The following user says Thank You to josh for this post:
Theory suggests this seasonality has worked in the past due to the fact that multinational corporations based in the US repatriate funds after the New Year, and this has a tendency to depress prices, which definitely puts it into the "funds flow" category. So the question is flow oriented or value oriented. Let price action be your arbiter.
The following 2 users say Thank You to tigertrader for this post:
I have been tinkering with some trades in 6E. Picked up some longs on the dump today, sold half 1.3693, still holding half with targets at 1.3708 and 1.3731 for the runner. Moving my stop in tight so I lock my current gains, if it is going to hit my targets, the move needs to happen fairly quick (Upward resumption in the next couple hours). A move below 1.3675 +/- a few pips would invalidate the type trade I am doing as it would likely spend significantly more time near the lows or potentially fail.
The following 2 users say Thank You to Luger for this post:
Oops...I mistyped, I meant 3883 not 3983.
Anyway it made it to 3883 and is playing yoyo around it. I'm going to wait a bit and see what happens from here, more specifically see if it goes to 3900 or through 3859 down to 3832
I reread this and am pretty sure I got the numbers right this time.
The following user says Thank You to kbit for this post: