Most Traders Have Heard Of Seasonal Patterns, Something Which Is Mostly Associated With Commodities. The Foreign Exchange Market Also Has Calendar Patterns Which Influence Trading, And Just Like In Commodities, Traders Can Take Advantage Of Them To Improve Their Odds For Success And Profits.brbMonthly PatternsbbrNearly All Currency Pairs Have One Or More Months During Which They Have A Directional Tendency. There Are Three Pairs In Particular Which Have Traded In The Same Direction During A Particular Month At Least Seven Years In A Row. AUDJPY Has Risen In January, While USDCAD Has Fallen In June And USDJPY Has Dropped In August. In Each Case, The Moves Have Been Significant. Let's Take A Look At USDJPY As An Example.brOn Average, USDJPY Has Declined Over 325 Points Each Year Since 1999 In The Month Of August, Which Translates To 2.80. While The Percentage Does Not Seem Extraordinary, When One Takes Leverage In To Consideration, It Is A Different Story. Had One Shorted 100,000 USDJPY At The Start Of Each August And Closed That Position Out At The End Of The Month, The Total Profit Would Have Been In Excess Of 20,000 (not Taking In To Account Interest Carry). That Is An Outstanding Return Considering The Margin Requirement For A Position Like That Is Only 2,000. And This Does Not Even Consider Compounding!brbWeekday PatternsbbrFor The Short-term Trader, There Are Also Patterns Of Behavior Which Are Based On Weekdays. It Is A Little More Complicated, However, Than Just Saying Buy Or Sell On Monday, For Example. A Secondary Condition Must Be Applied, Which Can Be Accomplished Using The Month. The Result Is Patterns Which Take Place On Certain Weekdays During A Given Month.brAn Example Of This Kind Of Pattern Is GBPUSD On Mondays In December. The Pound Has Risen 73 Of The Time On Monday During The Last Month Of The Year Since 1999 (31 Observations). The Average Move Has Been 40 Pips. Assuming A 5 Pip Spread, A Trader Who Entered Traded This Pattern Over The Last Seven Years Would Have Booked Over 1000 Pips In Profits, Which Translates To More Than 10,000 If One Took Positions Of 100,000 GBPUSD Each Time.brbTrading The PatternsbbrThe Examples Outlined Above Are Just A Couple Of The Patterns Which Can Be Found In The Forex Market. There Are Many Worth Incorporating In To One's Trading. Obviously, One Strategy Which Could Be Employed Is A Simple Enter-and-hold Based On The Pattern For A Given Month Or Weekday. That, However, Does Leave One Open To The Both In-trade Draw Downs, Some Of Which Can Be Substantial, And The Simple Fact That Patterns Do Not Always Repeat Every Time, And Sometimes Change. BrAn Alternative To Enter-and-hold Is To Use Calendar Patterns To Bias One's Trading. For Example, A Day Trader Could Look For Opportunities To Buy In To Weakness In GBPUSD On Mondays In December. Similarly, A Swing Trader Could Use Short-term Breakdowns To Enter In To Short Trades In USDJPY During August.brThe Trader Looking To Employ Forex Calendar Patterns Must Utilize The Same Good Risk Procedures As Are Always Necessary. This Applies Regardless Of The Strategy Employed.p
