Full Moon/Moon Phases/Lunar Cycles Trading Strategies Explained (Rules, Settings, Backtest, Example)
Some traders believe they can use the phases of the moon cycle (lunar cycles), such as the full moon, to time the market and make profitable trading decisions. This has given rise to the Full Moon/Moon Phases/Lunar Cycles Trading Strategies. What are they?
The Full Moon/Moon Phases/Lunar Cycles trading strategies are a method of analyzing and making trading decisions based on the phase of the moon. The strategies are based on the idea that the phase of the moon can influence market behavior and that certain moon phases are more favorable for making trades.
In this post, we answer some questions about the Full Moon/Moon Phases/Lunar Cycles trading strategies. At the end of the article, we provide examples of backtests.
How the Moon Phases and Lunar Cycles Impact Trading Strategies
The moon and its phases have been thought by some traders to have an impact on market behavior and trading strategies. Some traders use a lunar calendar to track the phase of the moon and make trading decisions based on that information.
There is no scientific evidence to support the idea that the moon and its phases have any impact on financial markets, and many experts consider this to be a form of superstition.
However, a 20-year study by the University of Lausanne showed that trading strategies based on the full moon and lunar cycles outperformed the overall market by an average of 3.3% per year.
Also, according to a study conducted by the University of Zurich, trading strategies based on the lunar cycle have outperformed the market by an average of 6.8% per year over a period of five years. We’ll cover more backtests later in the article.