Using Lunar Cycles to create a Swing Trading Edge(In Stocks)

The number of traders using lunar cycles bugged me recently so I decided to look into it and see if it was all Lunacy.http://www.theatlantic.com/business/...-market/19933/

http://www.bus.umich.edu/pdf/mitsui/...Moonstruck.pdf

There is lots of research done on it. From the respected peer reviewed academic journal The Journal Of Private Equity to many research papers done at colleges and elsewhere. Behavior physiologists have also looked into it.

The statistics are undeniable. The market gains 2-3x more during new moons and waxing moons than full to waning moons.


Why? It has to do with women... Most women on average still have their periods tied to the lunar cycle. Investors wives mood swings have a large impact on whether they feel like buying stocks or not. Be careful if everyone's wives are on the Rug... They might just be so stressed out they panic and crash the markets! LoL...

So, how can you use this scientifically proven fact of equities markets to your advantage? It's best to plan your swing trades long into new and waxing moons. It's best to plan your swing trades short into full and waning moons.

This will give you a double advantage over investors that are not paying attention to the effects of the lunar cycles.

One of the biggest influences overall on the market this year in the bigger picture isn't the lunar cycle which provides a slight push and pull on the market... It's the Election year cycle where the market is on average 7-8% stronger than non election years.

One thing this chart below proves... Beware of German women on their periods... They really stress their men out and destroy their investment optimism. Italian men are not so effected. If you look at their cultural differences this actually makes total sense. Take advantage of it while you can. The effects of the lunar cycles will diminish as more quant funds and others add the correlation to their models and price it out.

The below was done off a 30 year data analysis. There are others done off of 100 year data analysis that show investments held during new/waxing cycles over 100 years would turn 10k into 400k+ while those during full/waning cycles would turn 10k into 22k.

You can definitely see the heightened optimism that puts in the market highs from the new moon into the waxing moon as investors are getting laid the most during these periods and feeling good during the last major bull market run.

Rotflmao...

There is actually enough of a correlation I am actually going to pay attention to this... Kinda odd we topped out on a new moon three times in a row on peak optimism recently. Technically there was a high statistical odds of price topping out in those areas from those price levels within the trend.

menstrual cycle is not timed to line up with the lunar cycle. If that were true all women would menstruate at the same time. Not only do they not do this but womens cycle lengths arent exactly the same for each individual. As for getting laid, women are actually horniest during menstruation, too much information? Probably best to stick to subjects you arent so ignorant about

Are you seriously arguing with the results of university studies and the Journal of Private Equity? LoL... Show me your credentials to go against what they say is scientific fact.

There is no other theory that would explain the moon cycle-stock correlation.

Your a freaking nutjob if you think that the moon is somehow effecting peoples thoughts and behaviors directly... Rotflmao... Go see a shrink dude!

Logical fallacy. You can't think of any other theory other than menstruation to explain it, ergo, there is no other theory. In fairness, periods do average out to 29.5 days, exactly the same as lunar cycle but not all starting at the same time. Can you imagine the carnage if they did all sync up. Shudder.

Anyway, much as this all sounds like cobblers, there is a definite connection with stocks. Anyone bothered to correlate vols with moons in FX? I'll spend 10 mins tomorrow if not.

Wow, wow. Money and puxxy, aren't they the two most powerful forces. Good to see many talented traders and also hidden gynaecologist talents round here
The science of speculation, and the ways of the woman. What a combination. God, if only I was an expert in both! The world would be mine

On a more serious note, periods can actually sync up. They don't know how, prolly not the moon, just chemistry, but nevermind.
http://en.wikipedia.org/wiki/Menstrual_synchrony

i cant say much on the relationship between stocks and the moon cycles,although i have read somthing relating everthing to moon phase and cycle.

i have a method of trading the ftse 100,which uses time cycles,cycles within cycles. its quite interesting to see how reliable they can be,especially the longer term,which in my case is around the 90 days.in 2 years of manually logging and trading using time cycles there incredibly reliable.i personally use 3 days upto 3 months,although they wont show so clearly unless you have reason to notice

theres some interesting stuff out there written by respectable types,the cycles from small time intervals have been related to the human herding synce,to the economic cycles of boom and bust,i wont try to explain but it seems very plausible,and my findings on the ftse have supported all ive read

... let down only by my memory It's 29.1 days on average. Dead end most likely.

But I had a quick look with data available, and using a small sample over 3 yrs:
the standard dev from the mean across whole period was 65 pips.
for a full moon 62 pips. Negligible.
for a new moon 74 pips.

That's a 16% difference between the two, which also ties in with the stock data. I only did it with vol not with direction because there's no inherent optimism/pessimism bias in a currency pair but still. Lunacy eh.

Obviously this is quick and dirty - bigger data samples, using time of day, using time windows to support US vs UK trading etc, but it may inspire someone to take it further.
Hop to it.

Thanks for the heads up, I'll pass those numbers on to someone who's better with maths than myself, I'm only having horrible headaches when I see so many figures on the same page. That's why I like money, only 1 number per side LOL

The way I always looked at this system and other systems is that is simply applies risk management parameters to the market. You couldnt simply trade without charts and without a stop just looking at the moon phase on your patek. Whatever system you apply to the market will either be successful or not over your sample size. Doesnt matter how the moon is feeling, its how your system is managed. I dont bash it and I dont trade it either.


Z