Profit from Seasonal Stock Trading

Posted by Mutual-Funds | Stock Articles | Friday 2 July 2010 12:22 am

As a professional, I believe that trading season usually think of the trading market, rather than actions. Many stocks are seasonal, that can be traded very profitable if the right strategies are used. Take for example the S & P, there is the old adage "Sell in May and then walk." This saying comes from the seasonal trend of the S & P go until May then cut around a couple of months until the "Santa Claus rally at the end of the year. If you look at a long-term seasonalChart of the S & P, you will see clearly this trend. Take a look at a chart of seasonal 20 years the S & P to illustrate this.

If you are a graphic to 20 years in season you can see that the transition from early March to late May, the S & P is up. Then cut around from June to October and draws once again from late October to the end of the year.

Let's say that you acted this season chart for the last 10 years (January 3, 2000 to December 29, 2009). You purchase in February26th each year, and get the fourth then buy back in June, October 26 and December 29 onwards. Take any action buy 100 shares of SPY at any time. Your chances of winning would be 65% (would have been profitable trades of 20 13). Their average gain on winning trades would have been $ 700 and your average loss per losing $ 440 This would have resulted in a yield of 6% a return of -3.58%, with a Buy and Hold Strategy deposited . A Buy and HoldStrategy will be € 3,500, where this strategy has lost over $ 6,000 profit with only 100 shares to do. Not a bad return. Can be better?

You can improve your rankings calculated seasonal crafts season with less number of years. I found that if only the last 10 years the seasonal charts seasonal Calculate your business is more profitable. Take a look at an S & P's seasonal chart with 10 years of data.

Using only the last 10 years instead of 20 years,I can see what seasonal trends in the recent past. Think 20 years ago, a buy and hold strategy worked very well in the stock market. This is not true today! With a seasonal chart 10 years if a different strategy for the signals have seasonal trade. They would sell short fifth which left in January and 12 March. Then he bought on March 12 and June 5 to the left. 28 Would buy again in October and December to exit28th Place.

This time, your odds of 67.5% (was 27 of 40 trades would be profitable). Their average gain on winning trades would have been for $ 819 and your average loss will be $ 293 This would produce a return of 18% to -3.58% return with a Buy and Hold Strategy deposited. Again, a buy and hold strategy will be € 3,500, where they lost this strategy has made $ 18,328.00 with only 100 shares! (Both examples are commissions as well!)

As you can seefrom the previous examples, trade with seasonal graphics can be very profitable. You can also use other indicators with seasonal traffic times to ensure that the Trend Trading to your business more profitable.