Question: What is seasonal data?

Answer: The ProTrader Digest uses seasonal data in every trade selection.

Seasonality refers to a pattern that depends on, or is controlled by, the time of the year. Seasonality appears in many places. For example, sales of Christmas cards logically peak before Christmas. Accounting business peaks around end of financial year. Sales of red roses peak just before 14th February. Many businesses, products and statistics are subject to seasonal variations. For the trader, it can mean opportunity.

Consider the demand for beef. In any economy, demand is greatest when the weather is the coolest. Logically more people eat roast dinners in the winter than they do in the summer. While demand for beef is high during BBQ season it tends to be less than good old home cooked dinner demand. On the supply side, during winter, weight gain in Live Cattle is low. So during the US winter, demand is high and supply is tight. This translates a seasonal variation in price. With a well timed trade, you can make money from this seasonal pattern.

From the above reasoning, you could say seasonal analysis is a style of fundamental analysis since it considers supply and demand factors. However, it is also technical in that it follows price patterns. Anyone who has studied statistics or economics knows seasonal analysis is common place. Things like retail sales numbers are often adjusted for seasonal variations.

There are seasonal influences in many markets. Herein lays the trading opportunity. A seasonal trader needs to be aware of these seasonal influences either by studying the fundamentals or the technicals (or both) to take advantage of these patterns.

I use several databases of seasonal data stretching back up to 25 years. I essentially take available the technical information and attempt to filter it down into selected profitable trading ideas.

-Guy Bower

Disclaimer: There is a Risk of Loss in Futures Trading
DISCLAIMER HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED THE RESULTS MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. THE RISK OF LOSS IN FUTURES TRADING CAN BE SUBSTANTIAL. YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PROFITS ARE NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THERE IS A RISK OF LOSS IN FUTURES TRADING.THE INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE, HOWEVER IT CANNOT BE GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IT IS SUBJECT TO CHANGE WITHOUT NOTICE. IT SHOULD NOT BE ASSUMED THAT THE SEASONAL PRICE TENDENCIES SHOWN HEREIN OR THAT THE SUGGESTIONS REGARDING THEIR USE WILL BE PROFITABLE OR THAT THEY WILL NOT RESULT IN LOSSES. PROTRADER LLC, ITS MEMBERS OR EMPLOYEES ASSUME NO LIABILITY IN CONNECTION WITH THE USE OF THE INFORMATION CONTAINED HEREIN.