This is a fascinating and niche topic within the realm of alternative or "astrological" market analysis. It's crucial to preface this by stating that trading based on lunar influence is not a mainstream strategy and is considered highly speculative. There is no robust scientific evidence conclusively proving a causal link between lunar cycles and market movements. Any such method should be approached with extreme caution, rigorous backtesting, and should only ever be used as a secondary confirmation tool within a broader, proven trading strategy that includes fundamental and technical analysis.
Various Methods to Trade Forex Using Lunar Influence
The concept generally revolves around the idea that gravitational changes or historical human behavioral patterns linked to the moon can influence mass psychology and, consequently, market liquidity and volatility.- Lunar Phases (New Moon & Full Moon): This is the most common approach. The hypothesis is that the heightened emotions and energy around the New Moon (conjunction) and Full Moon (opposition) lead to increased market volatility, potential reversals, or breakouts.
- Lunar Cycles (Perigee & Apogee): This method focuses on the moon's elliptical orbit. Perigee is when the moon is closest to Earth, theoretically exerting the strongest gravitational pull, potentially increasing volatility. Apogee is when it's farthest, suggesting calmer markets.
- Solunar Theory: Popularized by hunter and fisherman John Alden Knight, this theory posits that fish, animals, and by extension, humans, are more active during specific times of day that coincide with the moon's position (moon overhead and moon underfoot). Traders might look for increased activity around these key times.
- Planetary Aspects and Geometry: More complex financial astrology involves looking at the geometric angles (aspects) between the moon and other planets (e.g., conjunctions, squares, trines). The belief is that stressful aspects (squares, oppositions) create market tension and volatility, while harmonious aspects (trines, sextiles) promote trend continuation. Various techniques have been created and some simplified by some legendary traders such as WD Gann, Michael Jenkins, Sergey Tarasov of Timing Solutions amongst a host of other estoric trading experts.
In this forum, we have for many months and in fact years seen a member Monfleri post his weekly analysis under the thread 100% forex signal featuring likely trading signals on swing trading Gold or XAUUSD. However, we are unable to access these posts a few months ago for various unknown reasons. He has, in his past posts, alluded to provide trading signals based on the moon influence on trading.
One of the most widely cited and testable lunar methods that can be adapted for both swing trading (holding positions for several days) and day trading (focusing on the volatile hours surrounding the exact lunar event) is the Full Moon-New Moon method.
If there is any interest in this method of swing trading we can go into details plus examples of how to use this method as part of a trading strategy in my next post.
