Trading seasonalities

The majority of traders will use either technical analysis, fundamental analysis, or a combination of both. But the time element such as the time of day, the day of the week, and the month of the year play a big role.

If you focus your attention solely on price and time, you may find that a pattern appears during a specific time. These patterns are known as seasonal patterns or seasonal cycles.

Everyone must have heard and remembered the saying “Sell in may and go away” as a stock market wisdom at the very beginning of their stock exchange career. This is one of the best known, if not the best known seasonality of all.

A dependency on saisionalities in agricultural raw materials is easy to understand, as these are most strongly influenced by supply and demand.

The supply of crop-based agricultural raw materials such as wheat or soya depends on the growth and harvest cycles. Here, however, it must be taken into account whether the raw material is limited to certain global cultivation areas or cultivation is possible in almost all climate zones, which reduces the price dependence on harvest cycles.

Similar cycles can also be identified at the meat markets. The supply at the cattle markets (Feeder Cattle, Live Cattle) depends on the fertility and growth cycles of the animals. Although modern factory farming leads to a shift in these cycles, the growth time of the animals must still be taken into account.

But other markets such as precious metals also show seasonal highs and lows. The demand for gold or silver is significantly higher during the big holidays than at other times.

Yet another aspect must be taken into account here: the interchangeability of different goods influences demand. If, for example.B beef rises in price, pork is increasingly in demand.

For example, there are reciprocal price effects between lean hogs and live cattle. Thus, the price development of lean pigs is often a reflection of that of live cattle.