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ICT Mentorship Core Content - Month 05 - How To Use Bearish Seasonal Tendencies In HTF Analysis
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ICT Mentorship Core Content - Month 05 - How To Use Bearish Seasonal Tendencies In HTF Analysis

Applying Seasonal Tendencies to Higher Time Frame Analysis

In this lesson, the focus is on applying seasonal tendencies to higher time frame analysis. The market of study for this teaching is going to be the New Zealand dollar or Kiwi.

Understanding Seasonal Tendencies

  • Seasonal tendencies are based on the utilization of the futures market.
  • The seasonal tendency may or may not be bullish for a particular pair.
  • Using seasonal tendencies like a roadmap can help you know the most probable direction certain times of the year for certain currencies or markets.

Applying Bear Seasonals and Quarterly Shift in Marketplace

  • This teaching is going to be applying bear seasonals but will also segue into how this helps us get in sync with hopefully a quarterly shift in the marketplace which is the goal of position trading or long-term trading.
  • Powerful moves that occur on these higher time frame charts monthly weekly and daily they're in hundreds of pips for foreign exchange so it behooves you to look at this marketplace when these higher time frame charts because regardless of what type of trade you're going to be.
  • Everything has a seasonal tendency but you have to study it and go through a long process of compiling all that data to get to the outcome what would highlight a seasonal tendency where it rests most predominantly.

Understanding Kiwi Dollar Chart

  • When both blue line and red line move in tandem direction, up or down at any given particular time, that highlights a high probability seasonal tendency.
  • It should be obvious what time of year there is a significant decline in price expected and when there should be an increase in price for Kiwi dollar.

Hone in on an Area to Capture Several Hundred Pips

  • These seasonal tendencies are used to aim at where the conditions lie that would set up a quarterly shift, in other words, a move that may take two to three months to unfold.
  • The goal is to capture several hundred pips in a long-term position trade or looking for the ideas to get us in sync with the institutional mindset where the direction of the market should go in these higher time frame charts since it's the smart money entities.

Understanding Seasonal Tendencies in Kiwi Futures Contract

In this section, the speaker discusses how seasonal tendencies can be used to understand price movements in the New Zealand Dollar futures contract.

Key Points:

  • The June and December contracts have a strong tendency to rally and decline respectively.
  • Seasonal tendencies are not panaceas but provide roadmaps for what price has done historically over a large sample size of data.
  • By compiling data from 2007 to present, we can see that these contract delivery months generally move in the same direction year after year.
  • While there are opportunities to sell Kiwi seasonally, we must also be mindful of certain times of the year when it has a predisposed nature to go higher.

Using Bearish Seasonal Tendencies to Get in Sync with Long-Term Bullish Quarterly Shift

In this section, the speaker explains how bearish seasonal tendencies can be used to get in sync with long-term bullish quarterly shifts.

Key Points:

  • Short selling opportunities may lead us to a quarterly move on higher time frame charts.
  • Mid-February to mid-March is a significant time point where there is a nice movement between the 19-year and 15-year seasonal tendencies.

Seasonal Tendencies for Kiwi Dollar

In this section, the speaker discusses seasonal tendencies for the Kiwi dollar and how to use them in trading.

Historical Record of Price Direction

  • The overall price direction for the Kiwi dollar is generally from mid-February down to mid-March.
  • There's a strong tendency for the Kiwi dollar to decline during this period.
  • Mid-March and April tend to have a significant rally, with May being the month where it makes a high.
  • It then sells off again, giving another bearish seasonal tendency.
  • September and October generally make a significant point of bullishness.

Using Seasonal Tendencies in Trading

  • The way to use seasonal tendencies is limited only to what current market conditions are.
  • It's not just taking these ideas and applying them to the marketplace blindly.
  • It's about lining up what current market conditions are and seeing if there is something technically in price that would support that seasonal tendency.
  • It's a matter of taking these ideas when there are strong tendencies for the market to move one side or the other at any particular time of year.

Other Opportunities

  • There are several other opportunities you can use besides being a long-term position trader using bearish moves seen in mid-Feb to mid-March and May that takes you down into June-July.
  • There's also a typical sell-off in January going down into February, another sell-off around mid-June down into July, and another sell-off around mid-August down into September-October.
  • Generally, September-October makes a very strong tendency for the Kiwi to rally.

Anticipating Seasonal Tendencies

  • We can anticipate these bearish seasonal tendencies showing us signs that the market is dropping down into quarterly bullish scenarios.

Kiwi Dollar Seasonal Tendencies

In this section, the speaker outlines the seasonal tendencies of Kiwi Dollar over a 12-month cycle. The focus is on identifying buying and selling opportunities during specific time periods.

Bullish Quarterly Shifts

  • March to April is generally a low period for Kiwi Dollar, making it a strong buying opportunity.
  • June to July is another low period that sets up a seasonal tendency for buyers.
  • September to October also gives us a strong tendency to be a buyer.

Bearish Sell-offs

  • Mid-February to mid-March is an excellent sell-off period when the market conditions are non-bullish.
  • May into June is another good sell-off period when the market conditions are non-bullish.
  • August into September provides weak points to sell on when the market conditions are non-bullish.

Yearly Breakdown

2007 Example

  • Mid February into March shows weakness in the marketplace as expected in bearish scenarios. There's also a small decline in May, which is another seasonal tendency for sell-offs.
  • However, these sell-offs set up opportunities for bullish scenarios during March-April, June-July, and September-October time periods as expected from seasonal tendencies.

Kiwi Seasonal Tendencies

In this video, the speaker discusses the seasonal tendencies of the Kiwi currency from 2008 to 2014. He explains how certain months tend to be bullish or bearish and how traders can use this information to make trading decisions.

Kiwi in 2008

  • A perfect market symmetry occurred with a bullish move leading into a bearish move.
  • The financial meltdown caused the Kiwi to follow other foreign currencies in a bearish trend throughout the year.

Kiwi in 2009

  • Mid-February to mid-March saw a decline of 600 pips.
  • March-April was a strong buying opportunity.
  • June-July had consolidation, and July sent prices higher.

Kiwi in 2010

  • Mid-February to March was flat.
  • May saw a decline of about 700 pips, setting up for June-July's bullish seasonal tendency that took off and sent price higher.
  • August had a small seasonal tendency to be bearish but retraced back up into an area where institutional overflow would give us bullishness. September and October gave us that last little leg price higher from that 74,100 to the 79.50 level.

Kiwi in 2011

  • Mid-Feb going into mid-March saw a nice decline followed by the bullish march-april seasonal tendency nailing it with huge extrapolated moves from that time period.
  • May saw about a 350 pip decline but found support at old resistance levels which created another leg higher for June-July's nice seasonal low off of previous down candle which is a bullish order block around that big figure.

Kiwi in 2012

  • Mid-Feb to mid-March saw a decline of several hundred pips.
  • May saw a very significant sell-off, and price moved almost 800 pips on the downside in the month of May.
  • June-July had a bullish low that rallied away from it.

Kiwi in 2013

  • Mid-Feb to mid-March saw a decline of several hundred pips.
  • May saw another decline leading to the bullish June-July low, which rallied away from it.

Conclusion

The speaker explains how traders can use seasonal tendencies as a roadmap for trading decisions. He emphasizes that larger macro events may take precedence over short-term quarterly effects, but traders can still use these tendencies as an additional tool for making informed trades.

Seasonal Tendencies and Quarterly Shifts

In this section, the speaker discusses seasonal tendencies and quarterly shifts in the market. He explains how these ideas can be used to predict when significant price moves are likely to occur.

Seasonal Tendencies

  • Mid-August to October is a bearish period.
  • Mid-February to mid-March is a bearish period.
  • May is a bearish month.
  • September/October is a bullish period.

Quarterly Shifts

  • The quarterly shift in September/October led to a rally from 60 to 68.50.

Using Time and Price for Analysis

  • Seasonal tendencies provide specific time elements that can help predict when significant price moves will occur.
  • When seasonal tendencies align with other indicators, such as interest rates or the dollar index, it can lead to profitable outcomes.
  • By blending time and price with quarterly shifts and seasonal tendencies, traders can attain an analysis perspective that most others cannot achieve.

Applying Seasonal Tendencies

In this section, the speaker encourages traders to use seasonal tendencies in their analysis. He explains how these tendencies can be powerful tools when used correctly.

Benefits of Using Seasonal Tendencies

  • Seasonal tendencies are powerful tools that many traders do not use or understand.
  • When used correctly, seasonal tendencies can lead to profitable outcomes.

Understanding Historical Price Movements

  • Looking at historical price movements can provide valuable information about what should take place in the market.
  • Markets move by a certain script and repeat themselves over and over again.

Examples of Seasonal Tendencies

  • Certain currency pairs have specific seasonal tendencies, but they all tend to follow the dollar index.
  • The speaker will cover the seasonal tendency of the dollar index in a future lesson.

Closing Thoughts

In this section, the speaker provides some final thoughts on using seasonal tendencies in trading.

Using Seasonal Tendencies for Trading Success

  • Traders do not need a lot of trades throughout the year to be successful.
  • By sticking to trades that align with seasonal tendencies and other indicators, traders can do very well.

Trading with Seasonal Tendencies

In this section, the speaker discusses how to use seasonal tendencies in trading to identify high probability setups.

Using Seasonal Tendencies for High Probability Setups

  • By incorporating long-term position trades based on higher time frame seasonal tendencies, traders can blend different strategies and dissect any market or asset class.
  • Focusing on trading during times of significant price moves due to seasonal and historical trends can lead to high probability setups.
  • Even if used as a directional bias tool, incorporating seasonal tendencies into trading can improve performance across all disciplines (swing trade, short term, day trade, scalp).

Conclusion

  • The speaker wishes good luck and good trading.
Playlists: 2017 ICT Private Mentorship Core Content Month 05
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