Q: Do you follow only seasonal data or are there other factors involved in your spread trading?
A: My entry or exit rules are not based entirely on seasonal data.
Seasonal data is used as a guide much like any kind of indicator, but it is not ‘the complete system’. I don’t believe in doing this as I don’t think the numbers are that reliable on their own. I do however feel they are a strong starting point.
As for other factors, I really like using RSI. Its old school perhaps, but I like it. I also look at Slow Stochastics (not as good as RSI), trendlines, candlesticks, support and resistance clusters (I don’t believe in levels as much as volume areas as in market profile). These are all things that add up to an overall trading decision.
You also need a ‘feel’ for what will move a spread. That is you need to know what is influencing the spread in the market place. Things like weather patterns, data releases, Commitment of Trader reports all play a role. How will these influences affect the spread?
