subject: Know More About The Seasonality Of The Commodity Trading Market [print this page] Know More About The Seasonality Of The Commodity Trading Market
The best way to go about conducting your stock trading business is to think about it calendar-wise. It is true, everything has a season and trading is no different whenever you consider the seasonality of markets. In case you correlate and identify your past market performance on a month to month basis, then you would be able to identify and learn to expect when the markets you choose have the best entry time and then the exit time.
This is just an example of how to conduct only a portion of your commodity trading efforts, though. The seasonality of markets is never a sure bet and you must never rely only on this type of market timing as the only type of investment you make.
Using a calendar method to explore the seasonality of markets can work for some if there are certain other market timing strategies implemented. The calendar seasonality works on a six month stock purchase and also stock sell season. It has been shown to be a good indicator to follow from a really old phrase coined by Wall Street-Sell in May, Go Away.
The seasonality of markets used by this tactic signals that the best buy symbol is on or about the beginning of the month of November. Hang on till the following year and about the end of April is the sell signal. This method has often shown to be the best time of stock trading performance. This has been shown to work about 70% of the time ever since 1957 by S & P 500 and has normally shown a gain of nearly 6% for those months.
The main difference being among the seasonality of markets your stock trading efforts only see a return of less than 1% in the 6 months of May to October. This is the summer trade season and it falls off like this because so many traders go on vacation so trading is low and slow for summer. Some traders though, can find great stock trading markets in this season if they are short term traders. Consider other seasonality of markets cycles when stock trading.
It is shown historically you'll be able to get higher return to the tune of nearly 17% in Pre-election years. Election years follow in second place with the average of gains being about 5%. The worst time, if following the seasonality of market trends will be post-election years and also mid-term election years. As you can see any stock trading venture is an unknown adventure. Thus, the seasonality of the markets is as good a strategy as any other types of strategies.
