ForecastCycles | Documentation

General

What is the seasonality?

Seasonality is the expected behaviour of a financial symbol in a year. It refers to particular timeframes when commodities/stocks/sectors/indices etc. are subjected to and influenced by recurring tendencies that produce patterns that are apparent in the investment valuation.

Tendencies can range from weather events (temperature in winter vs. summer, probability of inclement conditions, etc.) to calendar events (quarterly reporting expectations, announcements, etc.).

The key is that the tendency is recurring and provides a sustainable probability of performing in a manner consistent to previous results.

What is the difference between seasonality and cyclical analysis?

Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year.

Any predictable change or pattern in a time series that recurs or repeats over a one-year period can be said to be seasonal.

Seasonal effects are different from cyclical effects, as seasonal cycles are observed within one calendar year, while cyclical effects, such as boosted sales due to low unemployment rates, can span time periods shorter or longer than one calendar year.

How is the seasonality calculated?

Seasonality is the expected behaviour of a financial symbol in a year. It is calculated by cumulating the average performances of each single trading day in a year, from January 1st to December 31th.

What are the lines that I see in the seasonal charts?

The blue line/lines are the seasonality and the red line is the financial symbol performance during the current year. It’s possible to add/change lines in every way you want.

Seasonal charts Video 1 Video 2

What do the six charts show in the charts page?

Following is a list with the textual explanation of the 6 charts and the relative video pill extracted from the “How to read each one of the 6 seasonal charts” video.

Classic Seasonality Video

The classic seasonality shows the average yearly performance of the symbol in the selected years. It is simply what we call seasonality: “the seasonality of Apple”, “the seasonality of Gold” etc.

Detrended Seasonality Video

The detrended seasonality is built from the classic seasonality and it has been detrended through linear regression and it shows better the major turning point of the market in a year, where it’s more reasonable to expect an high or a low from that market.

Percentage of Positive Month Video

The percentage of positive month chart is one of our favourite chart and it shows for each month in a year the frequency of the times a symbol has been positive, so how many times it has closed above the opening price of the month. For example Goldman Sachs has been positive 80% of the time in February from 2000 to 2017 and in September just 20% of the times.

Monthly Average Performance Video

The monthly average performance chart shows which is the expected historical performance of the selected symbol (or ratio) in each month. For example Facebook average performance in January has been +7% and in August -3%.

Monthly Average Volatility Video

The monthly average performance chart shows the average volatility of the symbol in each month. It is calculated by averaging the distance between the monthly lowest low and highest high. It could be a really interesting information expecially for option traders.

Equity Line Backtest Video

The equity line backtest is another of our favourite chart and shows the historical result by investing long in the selected financial symbol each month from the first available year from a starting capital of $10,000. It’s a way to understand how much a month has been steadly bullish or bearish for that financial market and how strong can be a filter based on this month in a trading strategy.

I would like to see the seasonality of gold priced in Euro, is it possible? Video

Yes, to do it just create the ratio between Gold (numerator) divided as operator and EurUsd. For a more detailed explanation, check the video.

Tickers

How can I search and filter tickers? Video

You can just use the provided forms inside the Tickers section on the website, or have a look at the video for more info.

Are stocks dividend and splits backadjusted?

Yes they are.

Are the commodities and stock indices prices prices of futures?

Yes they are continuous future prices.

There isn’t a symbol I would like to see, what can I do?

Write to us and if possible we will add it.

Algorithmic Rank

What does the algorithmic rank show?

The algorithmic rank shows the financial symbols which have the best seasonal statistics in the current month, adjusted by the present price. For example if the expected performance for Amazon in May is +10% it could be in the top of the rank at the beginning of May. But if Amazon on 15th of May already rose +8% it will not be anymore in the top because the residual expected performance will be just 2%. This is a simple example because the algorithm also take in account other parameters as percentage of positivity, average volatility etc.

How to read Algorithmic Rank? Video 1

In this video Andrea explains the meaning of each voice in the algorithmic rank tab.

Using Algorithmic Rank to buy Microsoft stock Video 2

In this video Andrea use ForecastCycles Algorithmic Rank to buy Microsoft stock in a demo account, to show beginners how to make a trade. It’s recommended before use real money to do practice, to study books, follow experts and analyze the interested market- Have a nice experience using ForecastCycles, for any question write us we will be glad to listen your opinion and comment.