by Amanda Harvey
What Is Astrology Trading?
Astrology trading is based on the principle that the financial markets are affected by planetary movements and lunar cycles. Predicting these effects may assist different types of traders in determining which stocks to trade and when to trade them. While this may sound a bit too esoteric for many, there have, in fact, been studies conducted by leading financial authorities which have correlated market movement with astrological data.
Mainstream Use of Astrology Studies in Trading
One such study was performed by the Federal Reserve Bank of Atlanta, which is one of the 12 regional banks in the Federal Reserve System, and the results showed a correspondence between geomagnetic storms and stock market decline. Another study, carried out by the Royal Bank of Scotland Group PLC (NYSE: RBS), showed evidence that a lunar cycle based trading system could outperform the market.
How is Astrology Applied to Trading?
As with many approaches to trading, trading using astrology is not recommended as a stand-alone technique, but rather as a possible complement to technical analysis. One way of implementing trading using astrology is as a method of timing the market. This may be done by studying historical astrological data, and the way it has correlated with market movement, and projecting this forward with the forecast of planetary activity.
Astrology may also be implemented in determining which stocks to trade. In selecting stocks, astrology traders may consider aspects of the company from an astrological standpoint, regarding factors such as the planetary elements which make up the ‘incorporation chart’ of the company. Research conducted in these areas indicates correlations between the performance and viability of a company, and its astrological chart. Once a stock has been deemed a suitable candidate for trading, the astrology trader then moves onto the application of astrology in determining the appropriate time to enter a trade.
Who Uses Astrology in their Trading?
There are many highly successful traders who have applied trading using astrology as a component of their success. A particularly noted trader was WD Gann, who developed several trading tools, including Gann Angles, based on astrology, geometry, astronomy and ancient mathematics.
Advice from Astrology Traders
Traders who use astrology techniques believe that they can successfully time the markets and determine entry and exit points by using these methods. Some advocate the use of astrology as a means of selecting stocks to invest in. It is advised by some that traditional analysis tools be applied to a trader’s strategy first, and then trading using astrology may be used as confirmation of their approach.
What is Needed to Implement Trading using Astrology?
A sound comprehension of financial astrology is the basis of what an astrology trader needs to conduct trading using astrology. Most astrology traders would consider the other essential tools to be an accurate astrological calendar showing daily transiting planetary aspects, and a program which facilitates the calculation of astrological charts. There are also numerous financial astrology software programs available that may be beneficial to a trader’s strategy, but it is noted that these programs are not simple to learn or use.
While trading using astrology may seem too offbeat to some traders, there is plenty of evidence that it can offer valuable insight into the movement of the market and the potential and performance of specific stocks. This technique is not a substitute for more traditional forms of trading strategies, such as used by options traders, but with sufficient knowledge, may be a useful addition to a trader’s system.