I decided to enter the CLJ-CLF spread. A little risky but it seems to be close to support level.

Average profit for last 15 years is $1722 and margin is a low $300.

This spread has had 1 loss in the last 15 years (in 2011) of $530, but drawdown was $1150

Let's see how this goes!

Regards

Kruger 

I decided to enter the CLJ-CLF spread. A little risky but it seems to be close to support level. Average profit for last 15 years is $1722 and margin is a low $300. This spread has had 1 loss in the last 15 years (in 2011) of $530, but drawdown was $1150 Let's see how this goes! Regards

I guess you traded (CL J18 - CLF18).
Did you long or short it?

maxinger 

I guess you traded (CL J18 - CLF18). Did you long or short it?

I bought CLJ18 and sold CLF18

Kruger 

I bought CLJ18 and sold CLF18

In my opinion the main risk for this trade is La Nina. The probability is currently estimated at 60 %. In this case the seasonals for CL show upwards towards the end of the year.

For this reason I currently do not trade CL from the short side.

Best regards, Myrrdin

You guys are rockstars. I hope to learn more about spreads and seasonality from you.

StopHunter 

You guys are rockstars. I hope to learn more about spreads and seasonality from you.

You are welome. Please feel free to ask your questions here. Good questions are important contributions to this forum and keep it alive.

Best regards, Myrrdin

Anyone trading seasonals can comment on season algo for trade recommendations and accuracy (I know it's a good for analysis but just starting and would like to get a feel for accuracy) thanks


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Awesome thread here. @myrrdin it seems that your criteria to take a seasonal trade are:

1. It has followed the seasonal trend throughout the year
2. It has a max drawdown in the last 15 years that rarely or never hits the average profit of the same period
3. Fundamentals are consistent with years past

Correct me if i'm wrong here.

Thanks,

Brett

Dabears2322 

Awesome thread here. @myrrdin it seems that your criteria to take a seasonal trade are: 1. It has followed the seasonal trend throughout the year 2. It has a max drawdown in the last 15 years that rarely or never hits the average profit of the same period 3. Fundamentals are consistent with years past Correct me if i'm wrong here. Thanks, Brett

Correct. In my opinion, the first one is the most important one. Usually, if the first criteria is fulfilled, the third one is fulfilled, too.

If the second one is not fulfilled, you should look for the reason. Eg. during the economic crisis 2008/2009 some commodities showed severe drawdowns. But this was not a typical year. Another example: Meat markets show untypical behaviour in years that were influenced by major deseases.

Best regards, Myrrdin

myrrdin 

Correct. In my opinion, the first one is the most important one. Usually, if the first criteria is fulfilled, the third one is fulfilled, too. If the second one is not fulfilled, you should look for the reason. Eg. during the economic crisis 2008/2009 some commodities showed severe drawdowns. But this was not a typical year. Another example: Meat markets show untypical behaviour in years that were influenced by major deseases. Best regards, Myrrdin

Makes sense. Thanks!

Brett