Moon Phases Indicator in forex is a tool that traders use to track and analyse the phase of the moon and its impact on the market. Now that may sound crazy to most, but just like the Fibonacci indicator, things in nature can be used to make trading decisions. Personally, I would only ever be considering a forex moon indicator with other forms of chart analysis, including technical indicators and price action. These are things that can tell you what is happening in the market right now, rather than being based on pure speculation.
What is the Moon Phases Indicator?
The strategy behind using the Moon Phases Indicator is to predict market movements based on the gravitational pull of the moon on Earth. It is believed that the moon has a significant influence on the tides, which in turn can affect the movement of currency pairs, here are four points supporting the strategy of using the Moon Phases Indicator:
- The moon’s gravitational pull can affect the liquidity of a currency pair.
- The phase of the moon can provide insight into the sentiment of traders.
- The moon’s phase can influence the volatility of a currency pair.
- Some traders believe that the moon’s phase can provide insight into the direction of market trends.
Moon Phases Strategy
Buy Signal
- When the moon is in a waxing phase (growing in size), it is believed to be a good time to buy.
- When the moon is in a full phase, it is thought to be a good time to buy as the market may be at a turning point.
- When the moon is in a first quarter phase, it is also considered a good time to buy as it may signal a change in trend.
Sell Signal
- When the moon is in a waning phase (shrinking in size), it is believed to be a good time to sell.
- When the moon is in a new phase, it is thought to be a good time to sell as the market may be at a turning point.
- When the moon is in a third quarter phase, it is also considered a good time to sell as it may signal a change in trend.
Moon Phases Indicator Pros & Cons
Pros
- Can provide insight into market trends.
- Can help traders predict liquidity levels.
- Can help traders gauge market sentiment.
- Can assist traders in identifying potential turning points.
Cons
- Lack of empirical evidence supporting its effectiveness.
- May not be accurate for all currency pairs.
- May not be suitable for short-term trading.
- Can be influenced by other market factors.
Conclusion
The Moon Phases Indicator is a tool that some traders use to analyze the phase of the moon and its potential impact on the forex market. While it may provide some useful insights, it is important to note that it should not be the sole basis for making trading decisions and should be used in conjunction with other analysis methods. As with any indicator, it is important to thoroughly test and evaluate its effectiveness before incorporating it into your trading strategy.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
