Best and Worst Forex and Commodity Performers In February (Seasonality)
Here are the currencies and commodities that do well or poorly in February, historically. Statistics include how often the prices rise or fall, and by how much, on average. Tickers mentioned: AUDUSD, USDCAD, Corn (ZC, CORN), Oil (CL, USO), Gold (GC, GLD), Silver (SI, SLV), Sugar (SB, SGG), Wheat (ZW, WEAT). Also, check out the Best-Performing Stocks in February.
Statistics are based on monthly opening and closings prices, and do not reflect overall volatility that occurs during the month. Commodity statistics are based on a continuous futures contract, which may differ from specific contract statistics.
Statistics are run on USD Index, AUDUSD, USDCAD, USDCHF, EURUSD, GBPUSD, USDJPY, USDMXN, NZDUSD for currencies and on Light Crude, Natural Gas, Corn, Gold, Silver, Copper, Coffee, Sugar, and Wheat for commodities. Applicable ETFs are also discussed.
Only the commodities and currencies on this list that tend to rise/fall in October more than 65% of the time (over the last 20 years) are discussed below. Other assets that are noteworthy but that don’t meet that 65% threshold may also be discussed. Applicable ETFs are also mentioned.
Seasonality statistics are best utilized in conjunction with strategies that provide exact entry, exit and risk management protocols. For examples of such strategies, see the Forex Strategies Guide For Day and Swing Traders.
Forex Seasonality For February
The AUDUSD has risen in 14 of the last 20 years (70%), moving up by an average of 0.5% in February.
The Australian Dollar ETF (FXA) has rallied in 11 of the last 12 years (92%), gaining 1.3% on average during February.
The USDCAD has fallen in 13 of the last 20 years (65%), dropping an average of 0.3% in February.
The CurrencyShares Canadian Dollar Trust (FXC) has rallied in February in 8 of the last 11 years, with an average gain of 0.5%.
Commodity Seasonality For February
February is the best month of the year for Corn (ZC) futures. They have rallied in 14 of the last 20 years (70%), moving up an average of 4% in February.
Teucrium Corn Fund (CORN) has moved up 5 of the last 7 years (71%), averaging 0.8%.
February is the best month of the year for Oil (CL) futures. They have rallied in 15 of the last 20 years (75%), moving up an average of 3.7% in February.
The United States Oil Fund (USO) has moved up 8 of the last 11 years, averaging 2.2%.
Gold (GC) futures have rallied in 12 of the last 20 years (60%), moving up 1.3% in February on average. Looking at any term shorter than 20 years, and gold has performed stronger. For example, over the last 10 years it moved up 70% of the time.
The SPDR Gold Shares (GLD) has moved up 9 out of the last 13 years, averaging 2.1% in February.
February is the best month of the year for Silver (SI) futures. They have rallied in 14 of the last 20 years (70%), moving up 4.1% in February on average.
The iShares Silver Trust (SLV) has moved up 9 out of the last 11 years, averaging 5.1% in February.
Sugar (SB) futures have fallen 14 of the last 20 years (70%). The average decline is -2.3%.
The Bloomberg Sugar SubIndex Total Return ETN (SGG) has dropped in 5 of the last 9 years, with an average decline of -0.3%.
Wheat (ZW) futures have risen 13 of the last 20 years (65%). The average gain is 2.1%, making it one of the best performing months of the year.
Teucrium Wheat Fund (WEAT) hasn’t performed as well in the short-term, dropping in 3 of the last 6 years (60%), with an average decline of -1.6%%.
Final Word on Forex and Commodity Seasonality
Apply other technical and fundamental metrics to help zero-in on exact entry and exit points. Seasonality is not covered in my stock or forex trading course because it is a not a requirement for successful trading. That said, it is an additional tool you may use.
Losing trades WILL happen. Don’t risk more than 1% (or 2%) of your trading account on a trade (risk = difference between entry price and stop loss price, multiplied by the number of shares). There is always a risk in trading, and you can lose much more than you expect (even when you think you are only risking 1%).
By Cory Mitchell, CMT
Disclaimer: This article should not be viewed as investment advice, and is not a recommendation for you to buy or sell. Past performance is not necessarily indicative of future performance.