This is an old April fool post from our blog (discontinued):
I have always been skeptical about astrology, especially when applied to such a complex and important concept as currency trading decisions. But even the most skeptical person can change his mind when approached with hard evidence in a form of pips that can be drawn from following the phases of our natural satellite. Who would have thought that getting full moon dates from a calendar and selling EUR/JPY currency pair on those dates would produce only one loss during nearly two years?
The chart below presents the histogram of the returns obtained by going short on euro vs. Japanese yen on full moon days. The data is calculated for GMT+2 timezone (both for the moon phase and for the daily returns). Obviously, the results when full moon days occurred during holidays and weekends are not displayed:
And this is just an example that was on surface and very easy to find. Other currency pairs show promising results too, while applying other lunar phases (new moon, half-moon, etc.) demonstrate potential for additional yield.
After numerous attempts to develop a fully automatic moon phase indicator, I have come to a conclusion that it is not possible to do accurate calculations without adding complex algorithms for assessing the moon cycle length. The problem is that the average length of a moon cycle is known and constant (29.530588853 days), while the exact length varies from cycle to cycle, resulting in situation where simple automatic calculation shows a moon phase a day early or a day late.
Luckily, the high-precision moon calendars are now widely available online and allow choosing any time zone, so that you can easily fit the dates to your broker’s timezone:
If you have any questions or comments on the nuances of application of the moon phases to FX trading, please feel free to post them below.
I have always been skeptical about astrology, especially when applied to such a complex and important concept as currency trading decisions. But even the most skeptical person can change his mind when approached with hard evidence in a form of pips that can be drawn from following the phases of our natural satellite. Who would have thought that getting full moon dates from a calendar and selling EUR/JPY currency pair on those dates would produce only one loss during nearly two years?
The chart below presents the histogram of the returns obtained by going short on euro vs. Japanese yen on full moon days. The data is calculated for GMT+2 timezone (both for the moon phase and for the daily returns). Obviously, the results when full moon days occurred during holidays and weekends are not displayed:
And this is just an example that was on surface and very easy to find. Other currency pairs show promising results too, while applying other lunar phases (new moon, half-moon, etc.) demonstrate potential for additional yield.
After numerous attempts to develop a fully automatic moon phase indicator, I have come to a conclusion that it is not possible to do accurate calculations without adding complex algorithms for assessing the moon cycle length. The problem is that the average length of a moon cycle is known and constant (29.530588853 days), while the exact length varies from cycle to cycle, resulting in situation where simple automatic calculation shows a moon phase a day early or a day late.
Luckily, the high-precision moon calendars are now widely available online and allow choosing any time zone, so that you can easily fit the dates to your broker’s timezone:
If you have any questions or comments on the nuances of application of the moon phases to FX trading, please feel free to post them below.