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BOOK YOUR FREE STRATEGY SESSION NOW >>At Unger Academy, there’s one thing we emphasize time and again: you can’t predict the markets.
However, some financial markets do tend to follow recurring patterns. But can these patterns truly be identified and exploited effectively?
In this video, we dive deep into Market Bias and Seasonal Trends, using Bias Finder—a tool specifically designed to statistically identify repetitive behaviors in the markets. While these analyses don’t provide certainties, they can offer valuable insights for developing structured and informed trading strategies.
Through historical data analysis, we’ll explore how equity indices, commodities, and other assets behave over time, assessing how reliable these trends really are.
What you’ll learn in the video:
-What is market bias and how to identify it with Bias Finder
-Key seasonal trends in financial markets
-Real-world examples of seasonality in gold and stock indices
-How to analyze historical data to recognize recurring patterns
-Tools & methods to integrate these insights into a trading strategy
Watch the video to learn how to leverage Market Biases for a more structured and informed trading approach. Enjoy! 🎥
Can we predict the market by analyzing past data?
Is it possible to estimate how the market will move in the coming days or weeks simply by analyzing its historical data?
Are there recurring price patterns in the markets that we could use to create our trading strategies?
In this video, we’ll attempt to analyze the main markets we typically trade to determine whether trends exist and if price movements can be predicted based on past behavior. We’ll explore whether what happened in the past occurred in a repetitive and consistent manner, potentially enabling us to develop a trading strategy.
The concepts of bias and seasonality in trading
In other words, we’ll be looking for biases. The concept of bias is one of the simplest triggers and one of the most common approaches you can use to create a trading system.
This refers to a market inefficiency that systematically occurs at specific times of the day or days of the week, for example. When it extends over longer periods, we refer to it as seasonality.
And that’s precisely what we’re going to be exploring in this video.
Introduction to the Bias Finder: how it works
Nowadays, there are several online services that provide information on market seasonality. However, at Unger Academy, we’ve developed software that allows us to conduct this analysis independently and in great depth using market data: the Bias Finder. Let’s dive in and take a look at it.
Here it is, the Bias Finder. In this folder on our computer, we’ve saved the historical data, which we can load using this button.
After this, all the financial instruments for which we have data available appear in this list.
In this case, we have 15-minute and 60-minute data.
Just as an example, today we will use 60-minute data, as we are interested in seasonalities—those slightly longer-term biases.
Thanks to the Bias Finder, we can analyze the various sectors.
We can decide which instruments to explore, such as stock indices, energy, currencies, metals, and analyze different time frames. In this case, 60 minutes, with a temporal horizon that could be intraday, weekly, monthly, or even annual.
Today, we will focus, as mentioned, on the annual horizon, as we are looking for actual seasonal patterns.
In addition to the time period, you can also choose between absolute or percentage data analysis—depending on the case, one may be more suitable than the other.
You can decide if you want to plot all available data on the graph generated by the Bias Finder, or if you want to plot individual years, but this may be less readable if there are too many years.
In this case, since we want to make a comparison, it may be more useful to select specific years to plot alongside the total.
Anyway, for now, let’s disable everything and look only at the total data available for each instrument we’ll analyze.
Annual bias analysis of the S&P 500
Let’s start, for example, with the S&P 500.
We’ll take the 60-minute data and load it.
Here we see that the available data ranges from January 1, 2010, to the end of 2024.
As we said, we want to analyze the data for the year, so we calculate our bias.
The calculation is now complete. The annual bias tab, which we selected, is highlighted in red, and we can now view the graph.
Let’s enlarge it for a clearer view.
The first thing we notice in the data available from 2010 to 2024 is clearly the upward trend of the stock index.
The S&P 500, like most stock indices, exhibits this underlying bias, meaning it has had a tendency to rise over the years.
Of course, there are periods of ups and downs.
This is an average of all the historical data available because the generated chart shows the performance of the futures expressed as the average monetary excursion over time, either in absolute or percentage terms.
In this case, we’ve selected absolute terms.
This allows us to analyze possible price trends and patterns over time.
If we look at it in more detail, besides the general trend from January to December, we can observe that the beginning of the year is typically bullish—at least during the first two or three months, though more often two than three.
After that, there’s usually a period of declines, possibly aligning with the start of quarterly earnings reports and the well-known "Sell in May" effect, which occurs around the month of May.
So, the market tends to drop in the first part of the year or stay flat.
Let’s move on to the second half of the year. After Summer—which seems to be a quite turbulent season for this market—and more specifically from October to December, we can see another notable rise that could coincide with the so-called Christmas rally typically observed in stock markets.
Comparing the S&P 500 and DAX: similarities and differences
If we wish, we could look at another stock index.
For instance, let’s switch to Europe with the DAX.
We’ll load the DAX data and calculate the annual bias trend here as well.
And we see that the trend is very similar.
This is not a surprise, since the DAX is also a stock index.
We observe the same behavior, with summer months being rather turbulent, and the end of the year showing a decidedly bullish trend—even more so than the S&P 500 in absolute terms. Nevertheless, the overall trend is the same.
We could take a look at specific years to understand if this trend, observed over the entire historical period, is more consistently repeated in different years. Clearly, this is an average across the entire period, but not every year behaves the same.
So, we could start with last year, for example, 2024, and add this year to the chart, along with the previous ones, like 2023, 2022, and 2021. This would give us a more detailed overview of the behavior in individual years compared to the general trend observed over the entire period.
In this way, we could strengthen our analysis if the individual years confirm the general trend we’ve seen.
Here, we can see that there are three years that are quite aligned with one another, while one year, 2022, stands out as behaving very differently.
We know that 2022 was a very challenging year for the markets, and this is particularly evident here.
For example, we could try disabling this year and see how it changes.
Sorry, I need to recalculate...
Let’s recalculate the Bias by disabling 2022.
Ok, so, now we see that for 2021, 2023, and 2024, the upward trend at the start of the year, followed by a pause or even a decline until May, and then a sideways phase during the summer months, is quite typical. This is usually followed by a rise towards the end of the year.
So, aside from some exceptions like 2022 or even 2020—the year of the Covid-19 pandemic, where we obviously saw a much sharper drop in March and April—the typical pattern of the index is fairly repeatable.
Of course, this doesn’t mean that we can simply trade this bias as it is, but we know that it does provide us with a starting point to better analyze a potential strategy.
Gold analysis: seasonal trends and anomalies
Now, let’s try switching sectors and look at, for example, the metals sector. Let’s choose gold.
So we’ll load gold data from 2010 to 2024.
Also in this case, let’s deselect the individual years and first examine the overall trend of our annual Bias.
And this is the information provided by the Bias Finder.
We can see a relatively bullish trend in the case of gold as well.
We all know that gold is considered a safe haven asset, which over the years helps maintain the value of what’s been invested.
This trend is quite evident, as gold shows a general upward movement.
Specifically, the first part of the year, up to April, appears to be the most prominent. After that, the summer months turn a bit more negative, and the latter half of the year becomes more volatile, with a decline towards the end.
So, one could consider taking advantage of this early-year upward trend.
Let’s see if this uptrend has been consistent over the past four years and confirm it with the market data we have available.
Here we observe 2021, 2022, 2023, and 2024.
2021, in this case, seems a bit of an outlier compared to the others. From 2022 to 2023, we see a fairly consistent upward trend until April. Then, this uptrend is followed by a sort of summer decline, and only in 2024 does the trend continue to rise for the rest of the year.
So, the only period worth considering, as mentioned earlier, might be this early-year upward trend. However, as always, it’s essential to approach this with caution and further analysis, since there are certain years, like 2021, that could deviate from the pattern.
Conclusions: how to leverage market biases
Well, of course, this is just a small glimpse of what you can do with the Bias Finder.
We could dive deeper into seasonality and the biases we’ve identified by analyzing different historical periods to check if these patterns repeat, thereby strengthening our analysis. This would allow us to build a trading system in a much more confident way.
That said, if you’re interested in these topics or need more information, you’ll find several useful links in the description.
See you next time, and happy trading!
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.