Crude Oil Seasonality Strategy

The Friday seasonality in crude oil trading revolves around a straightforward principle: purchasing oil assets on Thursdays, anticipating a price increase on Fridays. However, the efficacy of this strategy isn’t uniform across all Thursdays. Research indicates that it yields more favorable outcomes when Thursday registers a decline in oil prices, hinting at market sentiment playing a crucial role in its success. One famous seasonality in the oil market is the tendency for the oil price to rise on Fridays. Let’s see the Friday seasonality in the oil price.

Analyzing Historical Data

A comprehensive analysis of historical data spanning from April 2006 to the present unveils intriguing insights into the performance of the Friday seasonality strategy. Results indicate a profit and loss (P/L) of 56.96%, with 98 trades executed, out of which 60 ended in profit. On average, each trade yielded a profit of 0.58%, showcasing the potential profitability of leveraging this seasonal trend.

Trading Rules

Implementing the Friday seasonality strategy entails strategic entry and exit points. Traders typically initiate positions on Thursday’s market close, particularly favoring instances where Thursday’s performance reflects a downturn. This strategic approach underscores the importance of market conditions in maximizing the effectiveness of the Friday seasonality strategy.

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P/L in %#fills#winsAvg.
56.9698600.58

Data is from inception in April 2006 until the present.

Here is the equity chart:

All other days seem to be more of a random pattern.

Oil trading strategies (list)

Here you can find all our Crude Oil Trading Strategies.

Conclusion

The Friday seasonality phenomenon in crude oil trading offers traders a valuable insight into potential market trends. While past performance serves as a guide, it’s essential to adapt strategies to evolving market dynamics. By leveraging historical data and employing strategic entry and exit points, traders can capitalize on the inherent seasonality within the oil market, enhancing their trading outcomes.

What is the Crude Oil Seasonality Strategy in oil trading?

The Friday seasonality trend in oil trading indicates “the tendency for the oil price to rise on Fridays.”

How is the Crude Oil Seasonality Strategy applied?

The strategy involves “buying on the day before – Thursday.” It works better “if Thursday is a down day in the market.”

Is buying on any Thursday’s close recommended?

“Buying on any Thursday’s close may not be such a good idea.” It tends to work better “if USO falls at least 0.75 times the 25-day average of the H-L (high minus low).”

What results were obtained from historical data analysis?

The strategy yielded “a profit and loss (P/L) of 56.96%” with “98 trades, out of which 60 were winners.” The average profit per trade was “0.58%.”

Which day is optimal for applying the Crude Oil Seasonality Strategy?

The optimal day for applying the strategy is “Thursday,” specifically when it’s “a down day in the market.”

How does Thursday’s performance affect the Crude Oil Seasonality Strategy?

Thursday’s performance significantly affects the strategy’s effectiveness, as it works better when “Thursday is a down day in the market.”

What is the profitability percentage of the Crude Oil Seasonality Strategy?

The profitability percentage of the strategy is “56.96%,” indicating its effectiveness in generating profits over the analyzed period.

How many trades were executed based on the Crude Oil Seasonality Strategy?

A total of “98 trades” were executed based on the strategy, contributing to the analysis of its profitability and success rate.

What is the average profit per trade for Crude Oil Seasonality Strategy?

The average profit per trade, as calculated from historical data, was “0.58%,” demonstrating the consistent but moderate profitability of each individual trade executed under the strategy.

How is the Crude Oil Seasonality Strategy applied in the oil market?

The strategy involves buying on the day before Friday, which is Thursday. Specifically, it works better if Thursday is a down day in the market.

Is buying on any Thursday’s close a good approach for the Crude Oil Seasonality Strategy?

Buying on any Thursday’s close may not be the most effective approach. It tends to work better when Thursday’s performance is down, indicating the importance of market conditions.

What are the results of applying the Crude Oil Seasonality Strategy to the oil market based on historical data?

The strategy yielded a profit and loss (P/L) of 56.96% with a total of 98 trades, out of which 60 were winners. The average profit per trade was 0.58%.

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