FTSE 100 Seasonality – Decoding Four Decades of Cycles

✍️ Written by Sagar Chaudhary 📞 +1 (438) 448-6881 🌐 X.com/ganntradeing | www.GannResearch.com 

Markets may appear chaotic on the surface, but underneath, they often move in recurring cycles. Traders who ignore these seasonal tendencies are like sailors navigating without the stars—they may move, but direction and timing are lost. The FTSE 100, London’s flagship equity index, has a long and data-rich history. Since 1984, its performance across the calendar months has left behind a clear footprint of repeating tendencies. This isn’t about predicting the future with certainty—it’s about stacking probability in your favor.

As W.D. Gann always emphasized, “Time is the most important factor in forecasting.” Seasonality is nothing but time-based probability—a recurring rhythm within the larger dance of cycles. In this article, I’ll take you through the FTSE 100’s seasonal record, month by month, over the past 40+ years. We’ll identify strengths, weaknesses, and trading windows that can give you an edge.

Data Source and Methodology

For this study, I worked with FTSE 100 daily closing prices from January 1984 through September 2025. That covers over 10,500 trading days, nearly 42 years of market action.

The steps of analysis were:

1. Monthly Grouping – Daily returns were aggregated into calendar months.

2. Average Monthly Returns – I calculated the mean return for each month across all years.

3. Volatility (Standard Deviation) – To understand consistency.

4. Seasonal Curve – A cumulative profile of the “average year.”

5. Identification of Best & Worst Months – Based on both profitability and reliability.

The advantage of such a long dataset is that random noise averages out. What’s left is the signal of seasonality.

Big Picture – The Seasonal Shape of FTSE 100

The analysis revealed a pattern that matches the old trader’s proverb:

“Buy in winter, sell in autumn.”

• January–March: The strongest stretch of the year.

• April–August: Generally flat, with small gains.

• September–October: Weakness concentrated, often associated with volatility.

• November–December: A recovery, capped by the famous Santa Claus rally.

This repeating curve shows how capital flows, investor psychology, and institutional positioning shape markets in rhythm with the calendar.

Month-by-Month Breakdown

📈 January – The Kick-Off Rally

• Average Return: +0.23%

• Win Rate: High relative consistency

The so-called January Effect is alive in the FTSE 100. At the start of the year, fresh capital allocations, fund rebalancing, and optimism about growth often lead to early strength. Traders should look for gap-up opens and continuation trends in January.

📈 February – Cooling Off

• Average Return: +0.04%

• Essentially flat, with no strong edge.

  After the initial optimism, markets pause. Many February rallies fail to extend strongly, making this a month for short-term trades rather than positional bets.

📈 March – Spring Momentum

• Average Return: +0.13%

• Another bullish month, completing the winter surge.

Historically, March has delivered gains, often linked to fiscal year endings for corporates and portfolio positioning. If you’re holding January entries, March is usually a good profit-booking month.

📉 April – Neutral, Despite Myths

• Average return just +0.03%.

Interestingly, April is often believed to be strong in U.S. markets, but the FTSE doesn’t show the same vigor. It stays positive, but not significantly. This is why “Sell in May” sometimes starts early in London.

📉 May – Flat and Uncertain

• Average Return: +0.03%

“Sell in May and go away” is an old City saying. FTSE 100 doesn’t collapse in May, but it fails to advance. For swing traders, May is a low-edge month.

📉 June – Modest Positivity

• Average Return: +0.07%

A slight bounce appears in June. Often this is a reaction to May’s weakness, but statistically, the gains are too small to rely on.

📉 July – Summer Lull

• Average Return: +0.01%

July is almost a breakeven month historically. Trading volumes dip as the holiday season starts, and rallies lack conviction. This is a month where false breakouts are common.

📉 August – Mild Strength

• Average Return: +0.06%

Despite being a low-volume month, August sometimes brings short rallies. These are usually counter-trend moves rather than sustained bull runs.

📉 September – Danger Zone

• Average Return: –0.07%

• Win Rate: One of the lowest.

September is notorious for weakness across global markets, and the FTSE 100 is no exception. Portfolio rebalancing, tax considerations, and risk-off sentiment often weigh heavily. For traders, September is best approached with defensive setups or short bias.

📉 October – The Crash Month

• Average Return: –0.11%

• Highest volatility of the year.

October has hosted some of the most famous global crashes (1929, 1987, 2008). While not every October is bearish, its volatility makes it a high-risk month. If September is the weak drift, October is the month where shocks often arrive.

📈 November – Quiet Recovery

• Average Return: +0.01%

November marks a transition. After autumn weakness, markets stabilize. Fund managers begin preparing for the year-end rally.

📈 December – Santa Claus Rally

• Average Return: +0.16%

• Strong and consistent gains.

The “Santa Claus rally” is one of the most reliable phenomena in global markets. Optimism, thin liquidity, and window dressing by funds push markets higher. In FTSE 100, December is the second-best month after January.

The Seasonal Curve – The “Average Year”

When all monthly returns are combined into a cumulative curve, we see a clear U-shaped profile:

• Uptrend: January to March

• Sideways Drift: April to August

• Drawdown: September–October

• Recovery: November–December

This profile mirrors investor psychology:

• Optimism early in the year (new budgets, allocations)

• Caution in mid-year (earnings digestion, macro uncertainties)

• Fear in autumn (historical crashes)

• Hope in winter (festive season, year-end positioning)

Why Does This Seasonality Exist?

Seasonality is not random—it reflects structural drivers:

1. Institutional Fund Flows – Pension contributions, portfolio rebalancing, and fiscal cycles.

2. Tax Calendar – UK fiscal year ends in April, influencing March flows.

3. Holiday Effects – Summer months (July–August) see thin volumes.

4. Behavioral Cycles – Optimism → hesitation → fear → relief, repeated annually.

5. Global Correlation – FTSE 100 doesn’t operate in isolation; U.S. seasonality bleeds into it.

As Gann wrote, “The future is but a repetition of the past.” Seasonality is simply that principle expressed through calendar time.

Trading Applications

How can traders use this knowledge?

1. Timing Entries

Instead of buying blindly, align with months of higher probability:

• Go long in December–January–March.

• Reduce exposure in September–October.

2. Hedging Strategies

• Use options or short futures in September–October to protect portfolios.

• Alternatively, rotate into defensive sectors during weak months.

3. Swing vs. Position Trading

• Swing trades: Best in January–March rallies.

• Position trades: Enter in December for multi-month hold.

4. Risk Management

Knowing that October is highly volatile allows traders to adjust position size. Avoid getting trapped in false breakouts during July and September.

Seasonality + Gann Cycles

Gann never relied on a single factor—he combined time, price, and pattern. Seasonality is one layer of time. When combined with:

• Planetary cycles (e.g., Sun in Libra often aligns with October weakness),

• Geometric angles (45°, 90°, 180° vibrations),

• Price harmonics,

…you get a multi-dimensional trading model.

For example, September’s weakness coincides with equinox energy shifts (Sun 180° opposite Aries). Gann often tied such dates to trend changes.

Practical Seasonal Blueprint

Here’s a distilled FTSE 100 Seasonal Trading Blueprint:

• January: Enter long positions, ride momentum.

• February: Tighten stops, partial profit booking.

• March: Remain long, exit before fiscal year shift.

• April–May: Stay light, avoid heavy exposure.

• June–July: Play short-term mean reversion.

• August: Watch for false rallies, trade cautiously.

• September–October: Go defensive; short setups, hedge portfolios.

• November: Prepare for year-end allocation flows.

• December: Enter long for Santa Claus rally.

This blueprint is not rigid. Always combine it with trend, volume, and cycle confirmation.

Trust the Rhythm

Over four decades, the FTSE 100 has sung the same seasonal song:

• Winter brings strength.

• Autumn brings weakness.

For traders, this rhythm is a compass. It won’t guarantee every trade, but it dramatically tilts the odds.

Seasonality is about respecting the calendar’s hidden hand. Combine it with your technicals, with Gann’s time counts, with planetary cycles—and you’ll have a roadmap few traders possess. Remember: markets are not random. They are vibrational systems—and seasonality is one of the simplest keys to unlock their rhythm.