ORANGE JUICE and the STARTING DATE of the seasonal window
My last analysis, signal, about the calendar spread on the Orange Juice, gives me the opportunity to talk about the starting date of the seasonal window. From my experience, I never buy or sell a spread on the day of the starting date of seasonality.
The reason is that many traders do that (even without a graphical pattern or signal) and, even though the manipulation is low in the spread trading, however, there is and in that day is stronger. You have seen that on the Orange Juice. A 1-2-3 low of Ross and the price goes over the point-2 exactly the starting day of the seasonal window (green vertical line).
And then? Stop loss. For that reason, I put my entry signal, not after the 1-2-3 low of Ross, but after the Ross Hook that has never been overtaken by the price. Now, even though the seasonality is pretty short, there is a bullish divergence (price/RSI), and the breakout of the resistance (blue trendline) will give the signal for buying the spread.
The reason is that many traders do that (even without a graphical pattern or signal) and, even though the manipulation is low in the spread trading, however, there is and in that day is stronger. You have seen that on the Orange Juice. A 1-2-3 low of Ross and the price goes over the point-2 exactly the starting day of the seasonal window (green vertical line).
And then? Stop loss. For that reason, I put my entry signal, not after the 1-2-3 low of Ross, but after the Ross Hook that has never been overtaken by the price. Now, even though the seasonality is pretty short, there is a bullish divergence (price/RSI), and the breakout of the resistance (blue trendline) will give the signal for buying the spread.
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