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Posted September 24, 2025 at 11:30 am
Dear Investor,
Do you know the most common question I am asked about seasonality?
It is: “Mr. Speck, how many years should I choose for calculating the seasonal trend in the chart so that a seasonal pattern is particularly promising and reliable?”
My answer is: “10 years is sufficient.”
Of course, statistically speaking, it would be more significant to take 20 years instead of 10, for example. Nevertheless, 10 years is sufficient in most cases.
You may be surprised by my answer at first glance. Statistically speaking, it is indeed better if a stock rose in 18 out of 20 cases during the autumn rally than in 9 out of 10. Although the hit rate of 90% is the same in both cases, it is supported by a larger number of values.
That’s why I used to take the largest possible number in most cases.
However, I have since carried out extensive retrospective calculations using past prices and seasonal trends to check what really worked.
These retrospective calculations showed that even with a calculation basis of 10 years, seasonal patterns can achieve a good outperformance.
Therefore, first look at seasonality over 10 years. This is also the default setting in Seasonax. After that, I sometimes select a larger number of years. This is very easy to do in Seasonax in the settings above the chart.
However, a larger number only gives me more certainty and is not the decisive basis for my decisions.
Timeliness is the main reason why 10 years is usually sufficient. After all, what does it mean today if a stock did not perform significantly better than the S&P 500 Index during a certain seasonal phase 10 or 20 years ago? Possibly nothing, because the reasons for seasonal patterns can change over time.
Like everything else in the markets, seasonal trends are not completely rigid, but rather dynamic.
That’s why, in most cases, it is sufficient for me if an instrument has displayed a strong seasonal pattern over the past 10 years. What matters far more than the sheer number of years is how evenly the returns are distributed within that period. I am happy to accept one or two outliers:
Incidentally, the most recent year can be negative — it may well have failed to generate a profit during the relevant seasonal window. My retrospective calculations have confirmed this time and again.
But how do I actually choose my stocks? I usually use the screener for this. The default setting for this is also 10 years.
You can also change this default setting if you like.
However, if you select 20 years instead of 10 for the NASDAQ 100, the number of stocks included drops from 84 to 66. And if you then adjust other parameters, such as the hit rate, the pool of stocks can shrink even further, sometimes becoming quite small.
This highlights another advantage of using 10 years: the screener displays more instruments, since not all stocks have a 20-year trading history. That’s why I rely on the default 10 year setting in the screener when searching for instruments with strong seasonal patterns..
I hope you have gained a better insight into the practice of seasonal trading.
With Seasonax, you can easily find good seasonal patterns to improve your trading.
I wish you every success – and lots of fun!
—
Originally Posted on September 24, 2025 – How Do I Find a Good Seasonal Pattern?
Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. Seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. Seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by Seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. Seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
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