"For those who have already accepted the discipline of trading based on fundamental relationships across contract months and among commodities, Scarr Visual Trading might be all they need." - Futures Magazine - April 2005, Software Review




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Purpose

I started Scarr Visual Trading in order to provide sound, accurate studies and charts for the analysis of the futures market. When I began my study of the futures market in 1994, most of the technical analysis I saw either had no sound basis or failed rigorous backtesting. My research into fundamental analysis showed that readily available data on supply and demand was immediately discounted by the market, giving no chance to profit. The only research I could base my trading on was that based on sound statistical and economic principles such as seasonal trends. But, when I tried to find seasonal charts with the features I wanted, I came up empty. So, I began writing programs to generate my own custom charts.

Background

I am a self-employed researcher with a background in the hard sciences. My formal education includes a B.S. in Mechanical Engineering and an M.S. in Physics from Old Dominion University in Virginia, and an M.S. in Math Modeling from Humboldt State University in California. I brought this education and experience to my study of the futures market and began writing programs which have greatly helped me in trading spreads and outright positions. These programs work for me and they can work for you as well.

My Pledge

I promise that the charts and studies presented on this site will be as accurate as I can make them. I also promise that there will be no “magic indicators” or “black-box” systems – all charts and studies will be fully explained. I will always be available to you for technical support and to quickly answer any questions. And finally, no program or system can make you rich overnight in the commodities market - anyone who tells you their system can is being un-truthful. I can tell you that if you use the programs on this site they will improve your trading. That is my pledge to you.

Dan Scarr

Scarr Visual Trading server1: 104.130.207.140
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Seasonal Methods

How does one decide which type of seasonal (average or link-relative) to use and when?

Let's first look at a 10-year March Corn seasonal made using the link-relative method as shown below. The first thing to notice is that there are two vertical scales: one on the left with units of the open contract (C2012H) and one on the right for the seasonal with units of percent. This allows the graph of the open contract to be overlayed with the graph of the seasonal. Notice that the seasonal (with standard deviations) fills the chart making it easier to read. But while this chart is great for seeing whether the TREND at any given time of the year is bullish or bearish it does not show how the LEVEL of the current contract compares to the historic level.

To see the historic level we need to look at the same seasonal made using the average method as shown below. Since the units of the seasonal are the same as for the open contract there is just a single vertical scale. We can see that the C2012H contract is over one standard deviation above it's 10-year average.

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