SEASONAL COMMODITY STRATEGY
Overview
Systematically trade recurring seasonal patterns in commodity futures. Based on decades of historical data showing consistent tendencies in energy, grain, and metal markets at specific times of year. Used as a bias, not a standalone system.
Setup
- 1.Research historical seasonal patterns using MRCI (Moore Research Center) or similar databases.
- 2.Identify high-probability seasonal windows (e.g., long gasoline Feb-April, short NatGas April-October).
- 3.Wait for current market conditions to align with seasonal tendency (don't fight a strong counter-trend).
- 4.Enter positions using technical analysis to time entry within the seasonal window.
- 5.Use hard stops — seasonality provides bias, not certainty. Individual years can deviate significantly.
Max profit
Seasonal moves typically range 10-30% for commodities in favorable windows.
Max loss
Defined by stop-loss. Poor weather, OPEC surprises, or macro shocks can break seasonal patterns.
Breakeven
Entry price.
When to use
As a bias-setting tool within a broader trading framework. Most effective when fundamental supply/demand conditions are consistent with the seasonal expectation.
When to avoid
As a standalone system without confirmation. During unprecedented fundamental disruptions that override seasonal patterns (COVID demand collapse, extreme geopolitical events).