Wednesday, December 13

Forex Seasonal Trends For October

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Seasonal trading in the forex has been one of the most reliable ways to make money trading currencies.

Perhaps the strongest trend for the month of October is the New Zealand Dollar’s tendency to rise against the U.S. Dollar during the month of October. Here are a few reasons why the trend makes sense.

1. Strong Gold Move Helps NZD and hurts USD – It’s pretty well known that gold can be a strong performer in the fall. The problem is that everyone knows that and it is hard for the average investor to make any money on that trade. However, not many people know about the New Zealand dollar. In fact, many people are more likely to trade the Aussie Dollar instead. The New Zealand dollar has been a good stealth trade in the month of October.

2. Weak Dollar in October – The dollar tends to fall during the months of September and October, in response to a strong dollar. That makes the Buy NZD and Sell USD an even more attractive play. Expect to see continued seasonal weakness in the dollar in October against the New Zealand dollar

3. New Zealand Resource Play – New Zealand is usually considered to be a stable currency with a responsible government standing behind the dollar. Also, it is believed that the New Zealand dollar is less likely to suffer any wide swings in a market meltdown. And the month of October is known for meltdown. The New Zealand dollar is seen as a safe heaven in unstable times.

4. New Zealand Trend Flows – Since the New Zealand dollar is seasonality strong during the month of October, fund naturally flow into the currency. By simply following the flow of funds into the dollar, you participate in the rise of the currency.

5. Signal Trading – Along with the natural flow of funds are the signal or robot trades and trigger buy signals. It is estimated that half of all forex trades are automated. And there are more automated buy triggers for the NZD trade. However, it is important to get in before the month of October in order to be positioned before those trades.

Seasonal forex trading is a great way to profit without losing sleep. However, it is important to have proper margin funds in your account to handle any wild overnight fluctuations. Be sure to check out all the other monthly seasonal trades coming up from this account.

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