The majority of traders have seasonal patterns to something associated with mainly raw materials. The foreign exchange market has natural patterns, affect the trade and in the same way that operators benefit in raw materials,.
to improve your chances of success and performance.
The monthly pattern
Almost all currency pairs have one or several months, during which a trend of direction of. There are three couples, especially, marketed especially for at least seven years in a row in the same direction for a month. AUD / JPY rose in January, while USD / CAD fell in June and USD / JPY fell in August. In any case, the movements have been significant. Let’s take a look on USD / JPY as an example.
On average, USD / JPY fell 325 points each year since 1999 in the month of August, which translates to a 2.80%. While the percentage seem common, taking into account the leverage effect it is a different story. She had a short 100,000 USD / JPY at the beginning of each month of August and closes this position at the end of the month, more than $20,000 had take full advantage (without taking into account the interest). That’s a return of the pending account of the margin requirements for a position like this is only $2,000. And this does also, that’s worse!
Pattern from Monday to Friday
for the short-term trader, there’s behavioral patterns based on the day of the week. It’s a bit more complicated, however, simply say, buy or sell on Monday, for example. A constraint should be applied, can be achieved by using of the month. The results are patterns that take place on certain days of the week in a month.
An example of this type of pattern is GBP / USD on Monday in December. The pound rose 73% of the time during the last month of the year on Monday. The average measurement was 40 pips. Under the assumption of an extension not negotiate over the last seven years, more than 1000 reserved pips on the benefits that translated into more than $10,000, if they took positions of 100,000 GBP / USD were this pattern every time 5 PIP, a dealer who has entered.
The above examples are just a few patterns can be found in the foreign exchange market. There are many who’s worth in a negotiation to integrate. Of course, a strategy that can be used is a simple insert and hold based on the pattern for a month or the specified day of the week. However, we have a drainage injured both commercial, of which some potentially significant and the simple fact that pattern repeated not always every time open and sometimes change.
Alternative to, and storage is the pretension of a trade with natural patterns,. For example, could an operators are looking for ways to buy weakness in GBP / USD on Monday in December. Similarly, a swing trader could use short-term damage, give to operations in the short USD / JPY in August.
Wholesalers, who must use the same good practice looking after use of natural patterns of foreign exchange, as they are always necessary. This is true regardless of the strategy.