81% of retail accounts lose money when trading CFDs with this provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Regulator asic CySEC fca

How to trade seasonal patterns in Bonds, today: German Bund Future (FGBL)

September 11, 2019 10:30

With the ECB rate decision on September 12, the German Bund Future will be on the agenda of many traders around the world.

After the remarks from Finnish ECB member Olli Rehn, who said in an interview with the Wall Street Journal on August 15, that "it is important that we (the ECB) come up with a significant and impactful policy package in September", it seems that the ECB is more and more likely to come out with a very big monetary stimulus package.

Such a step could be seen as bullish for the German Bund Future, since yields should be expected to drop further into negative territory.

That said, a seasonal bullish pattern in FGBL comes into play. It has developed over the last 21 years between September 16 and 30, and gives us a chance to formulate a strategy to trade the German Bund Future.

Seasonal Pattern in FGBL

The key parameter of this bullish seasonal pattern is as follows: between September 16 and 30, FGBL saw an average gain of 123 ticks for 17 of the past 21 years.

In the remaining four years it dropped on average only 46 ticks, while the maximum loss was 137 ticks and the maximum drawdown 138 ticks.

Trade the Seasonal Pattern: #Bund_U9

And now the key question: how could we trade this?

Here's the plan:

  1. After identifying the profitable seasonal window, buy #Bund_U9 on the closing price of the starting date on September 16 (21:59 CET).

  2. Identify the maximum loss within the seasonal period. Then, have a look at the daily chart and the ATR(14) indicator.

    >If the maximum loss is above the ATR(14) reading, round it up to the next round number and use it as worst-case-stop.
    >If the maximum loss is below the ATR(14) reading, use the ATR(14) as your stop-width (rounded up to the next round number).

  3. Look at the average gain of the seasonal pattern, and place the take profit at this distance from your entry point.
  4. If the trade is not stopped out or it does not reach its take profit within the seasonal period, end the trade market on the closing price on September 30.

Looking at current market data, since the ATR(14) in #Bund_U9 on a daily time frame is currently trading between 90 to 100 ticks, while the maximum loss of the window was 137 ticks, our worst-case stop will be placed based on a maximum loss 137 ticks away from our entry price.

Meanwhile, the average gain of the seasonal pattern is 123 ticks within this period. So, after entering the trade on the closing price of September 16, we would add 123 ticks to get our take profit level.

Source: Admiral Markets MT5 with MT5-SE Add-on #Bund_U9 CFD Daily chart (between May 28, 2018, to September 3, 2019). Accessed: September 3, 2019, at 10:00 PM GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the FGBL increased by 12.3%, in 2015, it increased by 1.3%, in 2016, it increased by 3.6%, in 2017, it decreased by 1.5%, in 2018, it increased by 1.1%, meaning that after five years, it was up by 17.9%.

Check out Admiral Markets' most competitive conditions on #Bund and start trading from as low as 3 ticks only. To test Admiral Markets FGBL offering in combination with the strategy described above, register for a free demo account today and experience the live market risk-free!

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Download MetaTrader 5 and begin trading today!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

Admiral Markets Group consists of the following firms:
Admiral Markets Pty Ltd
Regulated by the Australian Securities and Investments Commission (ASIC)
Admiral Markets Cyprus Ltd
Regulated by the Cyprus Securities and Exchange Commission (CySEC)
Admiral Markets UK Ltd
Regulated by the Financial Conduct Authority (FCA)
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.