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I don't think anyone here expects a lunar cycle to be anywhere near
perfect. However, if there is a slight correlation, then when there are
other cycles or indicators at that time, it may add a few more percentage
points toward a preponderance of evidence to give one the confidence to do a
trade.
Trading is not about perfect science. At its best, its a little science, a
little art, and hopefully a lot of skill. Each information input should be
viewed as incremental and cumulative. No one piece of information should be
taken as a make or break. Those with the best information bits and a
skillful execution will probably be succesful. To think anyone piece of
information will make or break a trading approach is absurd. If I can find
anything that canl add a few percent points to my odds, I am interested.
Cheers,
Norman
----- Original Message -----
From: "DH" <catapult@xxxxxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, May 23, 2001 1:55 PM
Subject: Re: [RT] DA moon and Delta
> > So just for fun, I
> > just chose 4 dates in the last 4 weeks - april 23, may 1, 7, 17 and
> > then chose a commodity TY M1. I placed the stars on the dates - pretty
> > impressive!
>
> Yep. At the risk of getting in trouble again for trying to inject a
> little logic into an emotional topic, let's think about it a little. The
> key is that +/- 2 days. Usually, I've seen trading days used for that,
> so that's 5 trading days total, or a week, or a quarter of a lunar
> cycle. If we look at all 4 phases of the moon, we've covered the whole
> month. If we only look at one phase, such as the new moon, that focuses
> it tighter but, if we are willing to accept several different events as
> significant, it still can hardly miss. Bear with me here....
>
> New moon +/- 2 trading days (25% of the month covered)
>
> 25% chance of a high during the period by random chance
> 25% chance of a low during the period by random chance
> -------------------
> 50% chance of a high or a low by random chance within +/- 2 days
>
> Now, if we can find 2 more conditions we consider significant, say a
> "continuation" and [I don't know what else], we have a 100% chance of
> "something" happening within +/- 2 days of the new moon.
>
> Just to be clear, I'm not claiming there is nothing to the moon effect
> or the planet effect or the sunspot effect. It's just that we need to be
> careful how we test it or we can fall into a statistical "can't miss"
> trap that reinforces what we already want to believe.
>
> Eyeballing the chart for correlations is particularly deceptive. System
> traders learn early on that the eye is easily fooled. Plot your favorite
> system as an indicator and your attention focuses in on the "good"
> events and totally misses many of the "bad" events. You will swear the
> system is nearly perfect. It's only when you run the statistics that you
> find all those times it didn't work as expected.
>
> --
> Dennis
>
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