Tuesday, July 26, 2011

The Moods of the Moon

An article from our web site on Profitable Stock Trading using the Moon Cycles by Randall Ashbourne.

Trading the mood swings of the monthly Lunar cycle will produce three-to-six times the profit of a simple, buy-and-hold strategy. I know that’s a dramatic call, but I intend to prove it.

All astrologers, and not a few experienced traders, know that – statistically – Full Moons tend to occur near temporary price lows and that New Moons tend to occur near short-term price highs.

And we all know there are Lies, Damned Lies – and Statistics. Many of the Lunar trading articles found easily on the internet tend to suggest the potential gains are relatively minor, or that the phenomenon inverts so often that it can’t be used as a reliable trading technique.

Even if we go to the trouble of mapping the Loonytoons on a price chart, a simple eyeball of the chart tends to make us think it works some of the time, but can be downright dangerous to our cash at other times – as with this 2011 chart of the SP500.
What “eyeballing” does is give you an impression. It doesn’t give you the facts.

Over the past year I decided to test the assertions for myself and log the results in a spreadsheet to test just how profitable it is to trade the mood swings of the Moon. The results were simply mind-blowing.(click the image to view larger size)

Not simply because they showed truly massive stock market profits during certain periods, but also because they showed when it was absolutely UNSAFE to risk your money.

What I discovered was that, statistically, the old assertions not only hold up, but when traded consistently over time, produce big profits for small amounts of time exposed to market conditions.

By introducing a simple mechanical filter before making a decision to trade, the spreadsheets showed not only which Moon phases could be traded safely, and when, but which trades should NOT be placed under any circumstances.

The results were so staggering they form a standalone system of trading in my new book, The Idiot and the Moon. But the proof of the pudding is in the eating, so let’s see what the facts are when we trade The Moods of The Moon during the first 6 months of 2011 on the SP500.

Read the rest of this article at  http://www.astrologicalinvesting.com/html/articles_pages/articles-ra_Moon-Trading_lunar_Cycles.html

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