Press Release: Seasonality plays a significant role in financial markets, as it does in many other industries. However, most investors and traders either completely forget about this aspect or do not fully use its potential. At the same time, it is discussed about a very simple strategy with a high success rate. XTB has prepared a series of videos on this topic and this week theirs was released first part. ProSo is it worth focusing on seasonality and how can we use it?
The advantage of trading based on seasonality is primarily its straightforwardness. It is just a simple statistical analysis of data from previous years and the results are quite logical. The fact that gas will be more expensive in the winter, when we use it the most, and corn will be cheaper in the summer, when its production is at its peak, is a good thing. maximu, probably not very surprising to anyone. But we have similar historical trends in many other instruments. Oil and gold most often rise at the beginning of the month, similar to is also the case with the S&P 500 index.
Of course, nothing is ever 100 percent in the financial markets. We cannot expect to simply buy gold on the first of every month and sell it on the third always at a profit. However, even so, this data gives us a huge advantage in determining current and future trends. This also follows from the statistics of traders, when traders who incorporated seasonality into your strategy, on most instruments achieve better results than their colleagues who ignore this data.
So the use in trading is clear, But does seasonality pay off even for long-term investors? Statistics tell us yes. Pro It certainly makes sense for stock investors to factor this data into a company's products and costs, and even investors who periodically buy S&P 500 ETFs can potentially increase their profits by optimizing the days they buy securities.
The possibilities of applying this strategy are therefore really wide. If you want to know more about the topic, in the video below you will learn, how to apply seasonality throughout the year or maybe even within individual weeks. You will also learn how to easily start using it seasonality directly in the xStation platform on any instrument and much more.
- The video entitled Seasonality in Investing and Trading is freely available on the XTB YouTube channel here
