Trading moon phases has become quite popular among traders, believing that there exists a relationship between moon phases and market movements. This strategy is based on an estimate of moon phases with the possibility to use different methods to determine long/short positions based on moon phases.
Note that we assume moon phases are perfectly periodic with a cycle of 29.530588853 days (which is not realistically the case), as such there exists a difference between the detected moon phases by the strategy and the ones you would see. This difference becomes less important when using higher timeframes.
Settings
[]New Moon Reference Date: Date of a new moon to be used as starting point for the cycle calculation. []Buy: Determine the condition to be used to open a long position
Sell: Determine the condition to be used to open a short position
Description
The strategy can use different buy/sell conditions, these are determined in the Buy/Sell settings drop-down menu.
By default, the strategy goes long on a new moon and short on a full moon. This setup is common since full moons are said to be related to depressed mood. However, it is possible to use inverse conditions.
Users can also go long on higher moons (new moons or full moons occurring at a price that is higher than the previous one when a new/full moon occurred) and short on lower moons, this would return a trend following strategy, using the inverse conditions (buy lower moons/sell higher moons) would return a contrarian strategy.
The above chart displays the strategy using default conditions.
The above chart displays the strategy of going long on a higher moon and selling on a lower moon.
Quick Summary
We provide a quick summary of the strategy using default conditions (buy on a new moon, sell on a full moon) on various tickers using the 4h timeframe (note that using a lower timeframe would return a backtest executing a lower number of trades).
Constant position sizing is used and no frictional costs are considered.
BTCUSD
The moon phases strategy has been regularly tested with BTCUSD, with traders highlighting how moon phases tend to occur during tops/bottoms. We test the strategy from 2019-01-06 00:00.
Excellent work Lux. I would please request that you consider these two feature requests that I think could turn this into an extremely profitable strategy.
1.With the higher and lower moons feature, would it be possible to differentiate between higher full moons and lower new moons? Basically, when we are having lower new moons, the market is trending down. When we have higher full moons, the market is trending up. Down trends are broken when we have a full moon that is higher than the previous full moon. Up trends are broken when we have a new moon that is lower than the previous new moon. Buying full moons during a downtrend is a losing strategy. Selling new moons during an uptrend is also a losing strategy. I would like to be able to make the strategy do the following: If current full moon > previous full moon then buy. If current new moon < previous new moon then sell. This strategy would find reversals as well as entry points along the up and down trends.
2. Identifying fractals during waxing and waning phases. Another feature that I think could help make this more profitable would be being able to identify swing highs during waxing phases and swing lows during waning phases. These would be our entry points indicating that price action is in alignment with the moon phase.
To summarize I believe if the strategy were capable of the following,
If current full moon > previous full moon and a swing low is formed (in waning phase), then buy.
If current new moon < previous new moon and a swing high is formed (in waxing phase), then sell.
Land-0-crypto
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So.. To the Moon? 😆😆🌚
dax520
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666
spreck
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@LuxAlgo I believe these are labeled wrong. On chart, Jun 24th is indicating a a new moon; however on lunar calendar it is a full moon. July 9th is indicated as a full moon on chart; however on lunar calendar it is a new moon, and so on. Just FYI.
LuxAlgo
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@spreck, Thanks for spotting this, pushing an update soon!
fxproject2016
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@LuxAlgo, Hi, thanks for sharing. Were you able to fix this full/new moon bug?
ICEKI
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You're awesome LuxAlgo! Appreciated for sharing this interesting strategy =D
1.With the higher and lower moons feature, would it be possible to differentiate between higher full moons and lower new moons? Basically, when we are having lower new moons, the market is trending down. When we have higher full moons, the market is trending up. Down trends are broken when we have a full moon that is higher than the previous full moon. Up trends are broken when we have a new moon that is lower than the previous new moon. Buying full moons during a downtrend is a losing strategy. Selling new moons during an uptrend is also a losing strategy. I would like to be able to make the strategy do the following: If current full moon > previous full moon then buy. If current new moon < previous new moon then sell. This strategy would find reversals as well as entry points along the up and down trends.
2. Identifying fractals during waxing and waning phases. Another feature that I think could help make this more profitable would be being able to identify swing highs during waxing phases and swing lows during waning phases. These would be our entry points indicating that price action is in alignment with the moon phase.
To summarize I believe if the strategy were capable of the following,
If current full moon > previous full moon and a swing low is formed (in waning phase), then buy.
If current new moon < previous new moon and a swing high is formed (in waxing phase), then sell.