I have been doing seasonal and cycle research for many years. There are many kinds of seasonal and cycles present in a large variety of markets that provide incredible profit opportunities for traders who pay attention to them. In fact, some of the very best and most successful traders in the world use seasonal and cycles patterns to choose their best trades.

One such trader is Kurt Sakaeda. I do not know Kurt, but I do know he has consistently won trading championships in the Robbin’s World Cup by using simple seasonal models. He has, as I recall, returned over 900% in some years using seasonals in the championship. When I see a trader is truly successful using a particular strategy, I quickly abandon all the trading books out there written by those who don’t even have a trading record, and try to discern what the best bias is in that arena.

I first learned of seasonal trading twelve or thirteen years ago from Murray Ruggiero. He had developed a “Universal Seasonal” program I spent a lot of time with. He also wrote of various seasonals and cycle trading in his book, Cybernetic Trading Strategies. I then began running all kinds of seasonal and cycle studies and much research which culminated in my becoming a CTA. I was so successful trading these cycles and seasonals that I quickly became the largest Emini S&P trader in the world. I later retired as a CTA, but my research lives on and a good deal of the fruits of my labor can be benefitted from at EminiForecaster.com.

One of my best choices when dealing with software that enables me to compute seasonal is a simple piece of code I wrote for Tradestation.

There is software available out there that costs $5000 that will basically do what I am about to give you here for free. This company that sells this has an aggressive marketing program that is very convincing. An investment manager with over $100 million under management called my office yesterday and asked me about this software. He told me about an online demonstration they presented him with and described their $5000 program.

I told him his mentioning this was very coincidental because we were currently developing a software program that would be the culmination of over ten years of seasonal and cycle research. I further told him that our software would do what theirs did and a whole lot more. In fact, it will be the most powerful seasonal and cycle program ever written. And, it will sell for a fraction of the price of what might otherwise be your best choice. He told me he’d be our first customer about three times before we got off the phone ;-)

While the seasonal program is in development, here is a free piece of TradeStation code that can help you to achieve much the same thing as other seasonal programs.

TRADESTATION CODE: If you have TradeStation, download the code from this link: http://eminiforecaster.com/SEASONALARTICLE.ELD

If you do not have TradeStation, you can view the code in this text document: http://eminiforecaster.com/seasonalcode.txt

By using the maximum adverse excursion report in TS, this piece of code will tell you,from any given trade day of year, or option expiration what your probabilities are.

Further, it can be set for any number of hold days for other secondary expirations. The BSe variable (see the code) is for long/Short, Mnthe gives you for any given month from expiration to expiration, TrdDayofYear gives you result for given trade day of year.

TrdDayofYear, if zero, it will set mode to expiration based entries. The current TDOY is printed to the print log. If Holde, is zero it will set exit to next3rdFriday expiration.

Stp, which is based on percent move from entry can also be used.

Once set up, you can view the max adverse excursion graph to determine best strike price to do credit spreads from, buy or sell or virtually any straight seasonal strategy.

By using the code provided, you can enter any of the variables to test the seasonal of your choice. It was mentioned to me that Apple Computer was a best choice for October, so let’s look at AAPL.

Let’s just do a simple seasonal for Apple stock in October for the last 10 years of data. October 1st corresponds to the 189th trading day of the year right now, so I input 189 into the variable TrdDayofYear and I want to hold for a month, so I simply enter 20 into the holde variable to hold for 20 trading days.

Above, we see what my screen looks like in TradeStation. Then what we do is open the TradeStation Performance Summary and use the Maximum Adverse Excursion Percent tool on the Trade Graph tab. Sounds like a big name? Don’t worry about it, I will tell you what you are looking at in a minute. Here’s what the report looks like.

Above we can see that the results for all the October trades over the last nine-ten years. On the vertical axis, it shows the final result for profit and loss. There were 9 trades total (this year hasn’t closed yet). One was a loser (the red one). The maximum draw down that occurred for any winning trade was around 11%. So there were 89% winners. 6 out of 9 of them were over 10% winners. One was a loser and lost around 28%. The nice thing is, once you get accustomed to this format, you can interpret the entire seasonal on a quick glance.

I simply leave the performance graph open and change the two inputs we used above to get, or hone in on any seasonal I want. The results are instantly displayed on the graph above. It is simply awesome!

You could get more complete stats by using the Tradestation Performance reports. These are excellent and much more extensive than other software you can currently buy for this purpose.

By the way, this TradeStation code we have given you above has a lot of other functionality you can use, but this will be all we will be able to cover in this article.

You could also use the Tradestation optimizer to adapt this program slightly to find the “best choice” for entry and exit dates for this seasonal using this software. That also is beyond the scope of this article. Either way, you can do this for a lot less than $5000. Perhaps your real best choice for software is this crude and simple free TradeStation code.

You can use this free TradeStation code I have given you above while you wait for the release of our ultimate cycle and seasonal program that will be released in the near future (it has capabilities way beyond anything any currently available software could even begin to do).

If you want to be notified about the release, simply go to www.Eminiforecaster.com and put your email in just above the “Let me see it” button on the home page and opt-in. We will notify you when the release is. My working title for the Software is “Cycle Vision”, so if you have questions or ideas about it, use that name in your email so we know you are talking about the new software.

Here’s the best part! If you decide to get TradeStation to try this out, tell them I sent you (EminiForecaster.com) and they will deposit a complimentary $50 in your account. This is our way of saying thanks for being part of the success of our company.

By the way, this $50 is just enough to do a trial to the EminiForecaster.com service if you aren’t already using it, so it is like getting a free trial to the service.