Using seasonal patterns to make money in the forex markets can be quite simple. Although not 100% accurate seasonal patterns can give one a roadmap to which trades to look for from month to month and year to year.

For example since 1999 when the Euro began trading if you go short on the third trading day of January and holding it for 23 days you will have an average profit of $2,565 up until 2008. This pattern has now worked 10 out of 11 years for a 91% success rate. The reason this pattern works in theory anyway is because European multinationals corporations based in the U.S. Generally tend to repatriate funds back to Europe which usually depresses the price of the Euro against the dollar and other currencies. In order to take advantage of this trade there are a few different options. Obviously the first I trading a euro pair like the eur/usd, but you could also trade a futures contract on the euro as well as an exchange traded fund (ETF) like the FXE.

There are numerous other patterns that exist throughout the year as well. For example the Swiss Franc or the Swissie as it's know has a strong correlation to gold. Since gold tends to rally in August in preparation of the Christmas season the Swiss Franc has a tendency to do the same. If you go long on the sixth trading day of August and hold the trade for 48 days the average profit over 33 yeas is $2082 with an 85% accuracy.

Finally there is the Japanese Yen, which usually takes a fall against the US dollar around October, because it is the middle of the fiscal year in Japan. This leads to lots of accounting adjustments which can influence their prices. This seasonal tendency usually begins around the mid-October and runs until the first week of February. This trade has had a 66% success rate over the course of 32 years with an average gain of $744.

One thing to remember about seasonal patterns is they are not 100% accurate and some years they appear and some they don't. This can be for any number of reasons, like recessions, or intervention from the central banks. However by using seasonal tendencies one can put the odds of a trade going in your favor, just remember to have an entry trigger such as price action and some technical indicators to confirm your trade. If you use these things in conjunction with one another you greatly increase your chances of becoming a winning trader. A good reference guide for seasonal patterns in Forex markets is the Commodity Traders Almanac.

If you'd like to learn more about seasonal patterns in the Forex markets or anything else regarding trading currencies please click on the link in the resource box below.