Blog

This spread combines several conditions to create good trading opportunity:

• 100% Win in last 15 years (there were only 2 losses in last 30 years)
• Nice support level to place stop loss
• Historical lows - Current year is moving around historical lows with nice space for profit
• Long seasonal window - A lot of time for seasonality to kick in. Possibility to take profit earlier

This spread combines several conditions to create good trading opportunity.

• 93% Win probability - Only one year in fifteen was looser
• Seasonal patterns correlation - All patterns up to 20 years have similar movement and correlation, more than 90% in seasonal window
• Double bottom formation - Support level to place stop loss
• Historical lows - Current year is moving around historical lows with nice space for profit
• Long seasonal window - A lot of time for seasonality to kick in. Possibility to take profit earlier

Spread is moving for last several months in range area of 0.5 - 2. Seasonality starts in March and ends in first half of June. Aggresive traders can enter at around 1.2, more conservative traders can wait for better price at around 0.8. Spread has nice support so stop loss should be placed below it at around 0.5.

Spread trade is the simultaneous purchase of one security and sale of a related security, called legs, as one unit. Opening spread trade, we are in long and short position. Why is that useful? There are several applications depending on intentions and traded security. Let’s see some of them.

SeasonAlgo is the first and only platform designed for seasonal spread trading. Started as personal project for spread analysis, released later publicly for fellow traders, improved with ideas from the community, SeasonAlgo became a professional service available to all spread traders. The whole platform consists of several tightly integrated modules.

In statistics, many time series exhibit cyclic variation known as seasonality, defined as the repetitive and predictable movement around the trend line. It is detected by measuring the quantity of interest for small time intervals, such as days, weeks, months or quarters. The best known seasonal progression is the outdoor temperature. Based on the time of the year, you probably know the range of temperatures you can expect.