Seasonality Trends 101: Applying The Annual Gold Cycle
Updated
The Annual Gold Cycle is one of the most useful and consistent trends that exist across markets. The reason I think so is because of what higher demand for gold can contextually imply about general risk sentiment. For example, knowing that November is a time-tested period for increased gold demand, one can ascertain the general appetite of other risk assets based on Gold's price action (or lack thereof in this case).
Further, a basic understanding of key seasonality trends can save you several poor entries per year that result from asset rotation. Perhaps it can save you a devastating loss or two as well. Additionally, and more importantly, in my opinion, understanding cycles like the one subjected can add at least three or four high probability trades to your arsenal per year.
Between the four or five bad entries/losses and the equivalent number of high-quality setups, that can take your trading game to a much more consistent level.
Lastly, the asterisk above notes that certain Fibonacci levels used in the bottom chart are not included in the standard set that will most likely fit any given annual gold cycle. The standard set includes the following: 0, 1, 0.618, 2.382, and 4.236.
Rather than transform 2017 cycle levels for your 2021 gold forecast, it is best to select the nearest prior annual cycle (August - August) and map the standard set of Fibs on that period's actual data. If you've found the right fit and confirm using other forms of technical analysis, then you will have a much more accurate projection of when and what price range the next set of swing pivots will occur than if you take a more creative route.
I mean, we're talking about gold here, not some thrice-split alt-coin that exclusivelyy exists for hacker-to-hacker (H2H) transactions.
Ultimately, I hope this post proves to be helpful for those who would like to learn an important, yet often overlooked, aspect of successful trading.
- Perennial Pig
GOLD
XAUUSD
SILVER
XAGUSD
GDX
GDXJ
NUGT
GLD
SLV
Further, a basic understanding of key seasonality trends can save you several poor entries per year that result from asset rotation. Perhaps it can save you a devastating loss or two as well. Additionally, and more importantly, in my opinion, understanding cycles like the one subjected can add at least three or four high probability trades to your arsenal per year.
Between the four or five bad entries/losses and the equivalent number of high-quality setups, that can take your trading game to a much more consistent level.
Lastly, the asterisk above notes that certain Fibonacci levels used in the bottom chart are not included in the standard set that will most likely fit any given annual gold cycle. The standard set includes the following: 0, 1, 0.618, 2.382, and 4.236.
Rather than transform 2017 cycle levels for your 2021 gold forecast, it is best to select the nearest prior annual cycle (August - August) and map the standard set of Fibs on that period's actual data. If you've found the right fit and confirm using other forms of technical analysis, then you will have a much more accurate projection of when and what price range the next set of swing pivots will occur than if you take a more creative route.
I mean, we're talking about gold here, not some thrice-split alt-coin that exclusivelyy exists for hacker-to-hacker (H2H) transactions.
Ultimately, I hope this post proves to be helpful for those who would like to learn an important, yet often overlooked, aspect of successful trading.
- Perennial Pig
GOLDXAUUSDSILVERXAGUSDGDXGDXJNUGTGLDSLVNote
Note
The chart above describes how you can use other technical analyses, such as Elliot Wave Counts and Fractal Symmetry, to confirm historically proven seasonality setups.In this case, the probability of a bullish move in gold has increased to the point where I will have no problem entering with size during periods within the "Buy Zone."
Hope this helps!
Trade active
Now would be an excellent time to sprinkle some long gold positions.It's never a sure thing in trading and today is a choppy session.
But gotta start somewhere.
Note
(GLD is incredibly oversold)Trade active
Might be taking off soon. Anything under 1900/oz. is a steal, IMO.Only thing that may hinder this secular bull move up is a heavy stock selloff. Even so, gold may react differently this time around..
Time will tell, GL bulls.
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