| USA/Canada: | (800) 454-9572 |  |
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| International: | (310) 859-9572 |
| USA/Canada: | (800) 454-9572 | |
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| International: | (310) 859-9572 |
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A managed trading system can be defined as a consistent set of guidelines for entering and exiting a market, where a trading agent applies those guidelines to actual trading.
A seasonal approach to trading looks at isolated but specific calendar periods during which markets (or spreads) have shown a consistent propensity to move in the same direction during a number of past years.
A seasonal approach recognizes that numerous factors affect market movement. Underlying these factors, however, certain conditions and events recur at annual intervals. Perhaps the most obvious is the annual cycle of weather from warm to cold and back to warm.
Other events that occur annually include the due date for U.S. income taxes every April 15th. Enormous supplies of grain at harvest time dwindle throughout the year. Demand for heating oil typically rises as cold weather approaches but subsides as inventory is filled. Such yearly events create annual cycles in supply and demand.
These annual cycles in supply and demand give rise to seasonal price phenomena - to greater or lesser degree and in a more or less timely manner. An annual pattern of changing conditions, then, may cause a more or less well-defined annual pattern of price responses. Thus, a seasonal approach to trading may be defined as trading the market's natural rhythm - an established tendency for prices to move in the same direction at a similar time every year.
Such trading patterns and price movements do not repeat without fail, of course. The seasonal approach to trading, as does any other methodology, has it own inherent limitations. Of immediate practical concern to traders may be issues of timing and contraseasonal price movement. Fundamentals, both daily and longer term, inevitably ebb and flow.
For instance, some summers are hotter and dryer - and at more critical times - than others. Even trends of exceptional seasonal consistency are best traded with common sense and perhaps a basic familiarity with current fundamentals to enhance selectivity and timing of a market's entry or exit.
The guidelines employed in Mr. O'Brien's seasonal approach to trading utilize the research of Moore Research Center (MRCI). MRCI is registered with the Commodity Futures Trading Commission (CFTC) as a publishing Commodity Trading Advisor (CTA). Mr. O'Brien is also a registered CTA.
MRCI's seasonal approach scrutinizes the last 15 years (when available) of a market's historical price data for recurrent trends, with a minimum reliability of 80% during similar time windows (MRCI chooses to base its research on the most recent 15 years. Another publisher of similar information begins with as few as 5 years while yet another utilizes as many as 25 or more. Regardless of the number, the basic philosophy remains the same).
Data is then subjected to further criteria established for average profit, duration of time window, duplication/overlap, and contract delivery/expiration.
MRCI does not characterize their data as a list of recommendations or, as to whether a particular trade is going to be good or bad (there is a fine line between research and recommendation: MRCI specializes in the former, they avoid the latter). Rather, they present quantified historical facts which suggest market tendencies.
MRCI's Strategy Sheets present historically reliable seasonal trades with a table of its relevant detail, charts illustrating seasonal patterns and the current market from both a daily and monthly perspective:
MRCI's Seasonal Spread Strategy #2741
MRCI encourages all traders to employ appropriate money-management techniques at all times.
Click the images below to enlarge:
Copyright © 1989-2008 Moore Research Center, Inc. Some data provided by Prophetfinance.com 1
Managed accounts are 100% liquid and funds may be withdrawn on any business day.
All trade activity, account balances & individual trade's status may be viewed in real time via on-line account access.
Feel free to inquire further into the seasonal approach to trading, its strengths and weaknesses and the full compliment of our trading services.
The above includes passages written by Jerry Toepke and excerpted from, Trade Your Way to Financial Freedom (Van K. Tharp, New York, Mc Graw-Hill, 1999). Also included are passages written by Moore Research Center, copyright 1998 - 2005, Moore Research Center.
Trading commodity futures and options involves a substantial risk of loss. Seasonal tendencies are a composite of some of the more consistent commodities futures seasonals that have occurred over the past 15 years. There are usually underlying fundamental circumstances that occur annually that tend to cause the futures markets to react in a similar directional manner during a certain calendar period of the year. Even if a seasonal tendency occurs in the future, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past or will in the future achieve profits utilizing these strategies. No representation is being made that that price patterns will recur in the future. Results not adjusted for commission and slippage.
1. SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN A SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR PERIOD OF THE YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES, AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST OR WILL IN THE FUTURE ACHIEVE PROFITS UTILIZING THESE STRATEGIES. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. RESULTS NOT ADJUSTED FOR COMMISSION AND SLIPPAGE.
