While technical analysis may be the only tool many traders use to place trades, seasonality can be used to further increase a traders odds.
- Buy in October. Or September if you have bigger appetite. September is the weakest month.
- Buy on dip before major holidays. Optimism and patriotism around holidays can cause upward bias.
- Sell losers ahead of the crowd in December for capital losses tax write-down.
- Buy small caps or big losers at the end of the year in anticipation of the January Effect.
- Market tends to be weak in the middle of a month, and strong around the turn of a month due to window dressing and mutual fund activities. Quarter ends should have even bigger effect.
- Sell on Friday and buy on Monday. Friday is the strongest day while Monday tends to be the weakest day.