Recently I have been studying currency pairs’ behaviors in different months and Im trying to see if there are any significant difference, decency and some other weird things ;) between the months in FX Market. Here Im simply considering EURUSD daily return in the month of January during 2002 - 2013. It should be added that daily return is counted base on the difference between Close Price Day2 and Day1, then Average of whole month, plus Standard Deviation (as the risk measure) and Coefficient Variation (as the risk/reward ratio) are calculated. The main purpose here is discovering EURUSD’s differences in January 2013.
Above table is showing EURUSD Daily Return behavior in the month of January. Although January 2013 is not including the highest return but this month brought the least risk since recent global financial crisis for EURUSD day traders! Actually last year, January 2012, was so disappointing by having high risk to low return. During last 11 years January 2004 and 2012 were worst Jans which brought pure risk for traders without considerable outcome.
Meanwhile it should be considered that it’s the 3rd time that EUR is beating USD constantly during January sessions, however trading in general has been riskier in Januarys of 2010-2013 comparing to Januarys in last decade.
In total the best point of Jan13 is about Risk to Return plunge to the norm!
It might be a good idea to find out which periods of the year have better risk to reward ratios for different currency pairs then a periodic trading plan can be prepared to form a seasonal portfolio for FX traders.