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.
In Conclusion
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.