Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology

USING LUNAR CYCLES IN TRADING

The lunar buy-sell strategy is based on buying on the new moon and selling on the next full moon (usually in 14 to 16 days). We quote here an excerpt from the Bank of Scotland report: “If an investor had invested PStg 1000 in FTSE in 1984, by now he would have approx. PStg 5,130 by holding the index, which represents index performance, whereas trading FTSE according to moon phases would make a big difference. First, consider buying FTSE on the new moon and selling on the full moon, this would result in PStg12, 116 overall figure for the same period. It means more than double the profits.” It is noteworthy that the strategy would have been even more profitable for the DAX and the HSI. The result for the S&P 500 data is also higher, but that is because the strategy was applied since 1928.

Conversely, buying on the full moon and selling on the new moon would have considerably underperformed the buy-hold strategy. This supports the theory of a correlation between index prices and moon phases because the new moon traditionally symbolizes low energy or energy accumulation, whereas the time of the full moon is a period of fruition, high energy, and spending.

The influence of planetary cycles on stocks has also been well documented by Raymond A. Merriman in his seminal work, The Ultimate Book on Stock Market Timing, Volumes 1 to 5, in which he describes how solar and lunar phases correlate to short-term trading reversals. Similarly, Patrick Mikula, using TradeStation ...