Education - Seasonal Patterns

Seasonal Patterns, how are calculated and why not use them for SL / TP

Basically, we have two ways to evaluate seasonality, numerically and visually. Both methods have their own advantages and disadvantages. In this article, I would like to explain how to correctly evaluate seasonality with the help of seasonal patterns and how to avoid common mistakes.


Why to Trade Seasonality?

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.