Most Power Trading Tool at Your Finger Tips, Use and Abuse it! What is this Tool? Statistics! Trading is all about probabilities! Technical analysis is about past patterns repeating themselves over and over! This is statistics! The best simple statistics tool that is available in the market is Seasonality.
Why? It tells you from a certain start date to a certain end date, what the statistics was for an instrument. This is very powerful and simple! So why does not everyone use it all the time to give them the edge?
There are a number of reasons. Here is what our experience has told us:
- Seasonality has become a marketing word to promote educational material. This is fine as long as the education is from real traders. Trader using the tool daily for any instrument and time frame. When we say any instrument, it should be any instrument in the world! This is currencies, futures, USA stocks, Europe Stocks, Asia stocks, etc. If it is only for one instrument class then the strategy could be “curve fitting” which eventually not work when markets change.
- Huge cost. Seasonality software can have a huge price tag. Only for the software purchase but also for the monthly data feed.
- Most of the formula for seasonality just looks at percentage move year by year. It does not account for volatility.
DO NOT WORRY. We are real traders and the seasonality we are going to show you how to use is Free and covers ALL Global instruments.
For our online extensive tutorial, you can go here: http://www.imtftrade.com/course-tutorial-2-2/
Let’s take some trades that have been taken and step you through the thought process of the trade. We are going to combine the seasonality with our IMTF technology:
Here is the seasonality for Dollar tree provide for free from www.alerttrades.com. You can access the software through a mobile too! The statistics show that DLTR for the month of November has a 86% probability of going bullish with an average move of 9.5%. Not only that, the price action movement that occurs in the month of November is 21% of the entire year.
Anything over 10% tells you it is a trending month. What good is a 86% probability if it only moves 0.05%. That winning but not making money! That is losing in theory!
Here is the 60m chart. As traders, we notice that seasonality either occurs in the first 15 day or second 15 days when you look at a monthly seasonality. See that is the traders in us!
We zoom down to a 60m because that is the bridge between the day traders and the swing traders. Trading a 60m and 240m gives a trader an edge. Did you know that?
WHat we look for in a chart. First, we look for a shaded area. A green indicates a bullish setup. A red indicates a bearish setup. Second, we look for black cross for support or resistance. This allows pull back trades to keep our risk low compared to breakout trades.
In this chart, we got the green and black crosses, As a result, we setup for a pull back bullish trade with over a 4:1 reward/risk.
Simple as counting 1-2-3!
Want another one! Here is HII. It has a 90% probability of moving 9.4% with 20% of price action occurring in November.
Here is the 120m chart. We looked at the 60m chart but the reward/risk was not good. Therefore, we had to go to higher time frame to get a bigger risk and bigger reward. This was a potential of 3:1 but gave us a lot more due to earnings.
Here is one of the best ones. It is ttwo. It had a 76% probability of moving 5.8% with 10% of the price action in the year occurring in the month of November.
With this trade, it did not have a setup. However, it was a major multiple support in the past. Below is the weekly chart where you can see that support clearly.
Here is the daily time frame:
Not convinced this is useful tool for real traders. Look at this trade. It is TSRO which states 90% probability of going bearish with an average 15% with 23% of the price action occurring this month.
In analyzing the charts, the charts were bearish. So we look at the seasonality as a catalyst for something to happen and looked for a bearish setup. We got a bearish pull back that yielded over 8:1 reward/risk.
Here is the latest trade. We found it in the seasonal scanner. IT is JNPR. It says on November 15, it has a high probability of going up for 30 days.
Here is the 60m chart. We got the green shaded area with the black crosses. It is struggling but we have time and statistics on our side. If we lose, who cares! It is low risk. All you need is one winning trade with 3:1 or higher to take care of this loss or more.
Check out the software for free! What you have to lose!
If you would like to learn how to trade like an institutional trader or learn more about our multi-timeframe email alerts, go to www.ichimokutrade.com or email us at firstname.lastname@example.org
For educational purposes only. Commodity Futures Trading Commission, Forex, Futures, Equity and Options Trading has large potential rewards, but also has large potential risk and may not be suitable for everyone. View our full risk disclosure: https://www.ichimokutrade.com/c/disclaimer/