Seasonality
A pattern that repeats at the same time of year, such as a retailer selling more in December.
Some seasonality is real and mechanical. Apple sells far more in the Christmas quarter than in any other, because it launches its phones in September and people buy them as gifts. That is verifiable in the published accounts and it repeats every year.
Other seasonality is an illusion produced by searching. If you test enough combinations of start and end dates on enough stocks, some will look like reliable winners purely by chance, in the same way that buying thousands of lottery tickets and showing only the winners looks like a method.
The distinction between the two is the whole game, and it is settled by asking how many combinations were tested and how many observations each one rests on.
The usual mistake. A seasonal pattern quoted without its sample size is not evidence. Eleven observations spread over forty years cannot support a forecast, however striking the average looks.
See also
This definition is part of the EPTA5 lexicon, written so that a reader who does not work in finance can follow our market notes without stopping. It is general information and not investment advice. Read the notes.