76% 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. 76% 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.

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.
Regulator asic CySEC fca

How to trade seasonal patterns in forex, today: the GBP/JPY

September 25, 2019 12:00

Today we want to focus on a bearish seasonal pattern in the GBP/JPY.

The BoJ on September 19 announced the decision to stay at its monetary policy status quo, maintaining the short-term Interest Rate Target At -0.1% and the 10-year JGB yield target around 0%. Later that day, BoJ governor Kuroda pointed to the continuing oversea economic slowdown which leaves further monetary stimulus on the table and the BoJ judging whether such an easing step is needed at the October meeting.

While over the last few weeks, rumours made rounds that the BoJ could consider cutting rates into deeper negative territory, the neutral stance turned such speculations down, leaves JPY with some bullish momentum on its side.

On the other hand, GBP still faces uncertainty in regards to the Brexit with time running out, the Brexit deadline on the October 31 nearing, and leaving Pound Sterling vulnerable to a drop on a broad front.

That said, the seasonal bearish window in the GBP/JPY between September 30 until October 10, which developed over the last 24 years, and puts the advantage in the currency pair also on the short-side.

Seasonal Pattern in the GBP/JPY

The key parameter of this seasonal bearish pattern looks as follows: between September 30 and October 10, the GBP/JPY saw an average drop of 437 pips for 18 of the past 24 years.

In the remaining six years, it gained on average only 178 pips, while the maximum loss and maximum drawdown were 372 pips.

Trade the Seasonal Pattern: the GBP/JPY

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

Here's the plan:

  1. After identifying the profitable seasonal window, we sell the GBP/JPY on the closing price of the starting date on September 30 (22:59 CEST).

  2. We 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. We 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 October 10.

    Looking at current market data, since the ATR(14) in the GBP/JPY on a daily time frame is currently trading between 140 to 150 pips, while the maximum loss of the window was 372 ticks, our worst-case stop will be placed based on a maximum loss 370 pips away from our entry price.

    Meanwhile, the average gain of the seasonal pattern is 437 pips within this period. So, after entering the trade on the closing price of September 30, we would subtract 450 pips to get our take profit level.

Source: Admiral Markets MT5 with MT5-SE Add-on GBP/JPY Daily chart (between July 06, 2018 to September 20, 2019). Accessed: September 20, 2019, at 07:00 GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of GBP/JPY increased by 6.9%, in 2015, it decreased by 4.9%, in 2016, it fell by 18.7%, in 2017, it increased by 5.5%, in 2018, it fell by 8.2%, meaning that after five years, it was down by 19.8%.

Check out Admiral Markets' most competitive conditions on the GBP/JPY and start trading from as low as 0 pips. To test Admiral Markets GBP/JPY offering in combination with the described strategy 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.