In previous post, we’ve covered the foundation of seasonal trading. In this post, let’s learn about how we can use free tools and platforms like TradingView and Stockcharts to identify seasonal trends that we could utilize to our advantage.
Recap: What is a seasonal trend?
A seasonal trend refers to patterns that happen repetitively in the market. Since seasonal trends tend to be relatively stable and reliable, they can be a valuable knowledge that could add massive value to a trader's trading career.
Identifying seasonal trends has been a tricky task in the past, but with many free platforms around, exploring seasonal trends have never been so simple.
Let’s dive right into it.
#1 Using TradingView to identify seasonal trend
TradingView is one of the best charting platforms around. Within TradingView, you can utilize it’s large indicator library to improve your investing and trading approach.
In TradingView, under ‘Indicators’, search for ‘5 Period Cycle Seasonality’, and add it on your charts:
'5 period cycle seasonality' shows you the seasonal trend of the instrument (eg. stocks, futures) you chose for the past 5 years.
For instance, let's insert the '5 period cycle seasonality' on the price chart of corn futures (ZC):
Since we are at the month of January at the point of writing this article, we could refer to the seasonal trend displayed under the '5 period cycle seasonality' as a reference of where price could potentially trend for corn in the coming months:
Based on the indicator, corn price is likely going to be bullish until early-mid June, then trends down thereafter.
#2 Using Stockcharts to identify seasonal trend
Stockcharts is another platform where one can explore seasonal trends for free.
Firstly, head on to Stockcharts. Under 'Seasonality', type the ticker/symbol for the stocks you want:
Let's try to find out if there is any seasonal trend for gold by searching for the ticker 'GLD', which is the ETF that tracks the price of gold:
From the seasonal data above, we can learn that over the past 10 years:
Gold tend to has its most bullish months in December, January, and July, as it closes higher above its open price 78%, 70% and 67% of the time respectively.
Gold tend to has its most bearish months in September as it tends to only close higher above its open price 11% of the time.
With this information, gold investors and traders can better improve their entry and exit approach by either entering on months when seasonal trend is bullish, and exiting or hedging their positions on months where seasonal trend tend to be bearish.
Verdict: Using free seasonality tools to improve your trading approach
With more powerful tools available to investors and traders these days, learning about seasonality has never been easier and convenient.
I hope the tools introduced in this post will be helpful in your trading journey!
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Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.
Leverage is a financial tool that comes with its advantages and risks. Please learn and understand both the upsides and downsides of leverage before using it for trading.
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