Astro-Trading Questions and Answers
Q: I’d like to try my hand at equities trading using astrological methods, but I’m not really sure where to begin. How do I make sure I’m taking the right steps with my trading?
A: The most systematic way to begin astro-trading is to start with the Basic Stock Market Astrology Home Study Course. It provides lots of detailed instruction, not just on market astrology, but also on the basics of trading and effective money management.
Once you’ve completed the home study course, you may want to consider becoming a participant in my individualized Coaching Program for Astro-Traders. When you participate in this program, I’ll work with you to get past your fears and misconceptions, and to help you connect your new-found knowledge with real-world results in the markets.
Using Stop-Loss Orders for Capital Preservation
Q: What do you think of trailing stops for investments in the stock market? What’s the best way to use stops? (Originalquestion submitted by Max Lenc of Colorado)
A: The stop-loss order, or simply the “stop” for short, is certainly the most critical tool in the successful trader’s arsenal. Your question is especially important for several reasons. First of all, stops are an essential component of effective money management when you are trading. Secondly, your experience with using stops and your basic attitude about accepting losses as a trader are often the key ingredients in developing the kind of winning psychology that is essential for profitable trading. Third, there are no immutable rules for setting and using stops. They essentially must be reinvented by every new trader, and creating stops is ultimately more of an art form than a science. In our own experience, learning to set and use stops appropriately has been one of the greatest challenges to becoming effective traders, and one of the most rewarding ones as well!
There are many approaches to creating stops, but the basic notion is always the same: a stop sets a pre-determined level at which a stock will be sold, avoiding the possibility of further losses. In the case of a long position, the stop is placed beneath the current trading price. When a short position is involved, the reverse holds true, with the stop placed at a price above the current trading price.
Trailing stops are used in coordination with the changing prices of a trending stock. As the price increases in a long position, the trailing stop does likewise, with the opposite being true in a short position. The trailing stop can be set at a specific dollar level below the current trading price (say at $2 below the previous day’s close), or it can be calculated at a fixed percentage rate relative to the changes in the trading price of the stock. Trailing stops are especially appropriate when a stock is moving up fast, but when a stock starts to trade sideways or dips slightly below its recent trading range, a trailing stop can sometimes take you out of a trade when you would perhaps rather stay in for a longer haul, since the prevailing trend may not really have reversed.
Other approaches to setting stops employ different parameters. You can derive stop-loss levels from Fibonacci retracements or from Bollinger bands. At times we have found that an easy way to work with stops is simply to take a look at the stock’s recent trading history on a technical chart – for example, you might choose to set a stop that is at a price just below the low of the previous week’s trading.
With the Financial Cycles Model Portfolio we adjust our stops weekly – you’ll find information about how we are changing them in the “Current Positions” section of each week’s newsletter. Be sure to check this section weekly so you can keep your stops current in your own trading account. Because we are astro-traders, we are particularly interested in stop-setting techniques that are connected to the cosmos. One of the best approaches that we’ve found is to base our stops on planetary price lines – you’ll typically find these mentioned in the description of next week’s “Stocks To Watch.”
No matter which technique we employ for setting our stops, however, there is one firm stop-loss rule that we believe should always be followed: never enter a trade without having a stop in place!
Investing in an Astro-Trading Portfolio
Q: How much money do I need to have to begin astro-trading?
A: The Financial Cycles Model Portfolio starts each trading year with $100,000, but you can use more or less than that amount to start your own trading program. Starting without a sufficient amount of capital to put at risk can make it very difficult to manage an ongoing trading plan effectively, especially when you face a string of losses. The tendency is to feel like the astro-trading system isn’t working for some reason, and then to get out of the market, ultimately missing out on opportunities for bigger profits.
When you begin your astro-trading program, it’s important to use only money that you can comfortably put at risk, and to decide how much of an initial investment matches your personal goals and levels of risk tolerance.
Losing Money in the Stock Market
Q: I’ve noticed in the track record for the Financial Cycles Model Portfolio that a lot your trades in the stock market wind up losing money. Shouldn’t an astrology-based system do better than that? Isn’t there some way to avoid losing money in the stock market altogether?
A: The only way to avoid losing money completely is to stay out of the stock market completely. Our approach to astro-trading, like any real-world trading system that makes money, includes some losses. In fact, we regularly plan to take losses – and to keep those losses small – to make sure that we’re in the market when opportunities for big profits arise.
Planetary Factors and Broad Market Trends
Q: I’ve seen research that says that the markets are up on an average 66% of the time. And the strong days in the month are the last trading day of the month and the first 4 days of the month, in which the market are up on an average on 75%. But in FinancialCyclesWeekly you mentioned planetary combinations that you say work to bring the Dow up 67%, 61%, 57%, and 59% of the time. Since some of these are smaller percentages of increase than the overall averages, shouldn’t we expect these planetary influences to lower the market instead of bringing it up? (Original question submitted by Bjørn Hedberg of Norway)
A: The answer to this question lies in the different time frames employed by various market analysis and forecasting methodologies. While it may be accurate to note that the market is up 66% of the time when seen from a long-range perspective, our concern as short-term swing traders is whether or not the market will go up in the immediate future, when we have a specific trade in play. Just knowing a long-term average trend is not enough for our purposes; we want to know whether or not the specific equities we are trading will be supported by a rising tide in the broader market during the duration of our trade. An examination of the long-term market trends will readily reveal that the general upward bias over an extended period of time includes many deviations from that norm, with some extended shorter-term periods of unrelenting bearish downtrends and some periods of frenzied buying that punctuate the long-term mean direction with more energetic rallies and peaks.
That’s one of the reasons we look at astrological factors in the first place as we do our market analysis. The planetary cycles and astrological dynamics present an ever-changing kaleidoscope, but the individual factors at work can be measured and then used as tools in forecasting – with some fairly specific implications about the strength and duration of their influence. When we add them to the mix in our market analysis, we do so with a background understanding of the overall direction and long-term temperament of the market as a whole. In other words, the astrological factors that impact the markets have a cumulative effect, with their weight and influence added to the overall expectations of long-range market trends.
The market has a general positive bias, but very powerful combinations of planetary factors can combine in certain ways that might lead us to expect a short-term downward move in the market action. On the other hand, if we get a group of planetary factors that all suggest an imminent upward market move, their influences can still be felt, even though they may not individually have enough strength to dominate the overall market trend. They each provide an incremental amplification of the prevailing market tendencies, giving us a higher level of confidence in forecasting a positive market run in the short term.
An Astro-Trading Fund
Q: You seem to have had pretty good success with astro-trading. Do you have any kind of fund that’s open to other investors? Is there some way that I can turn over my money to you so that you can invest it for me?
A: No. At present I don’t actively manage other people’s money. Instead I provide a variety of tools and resources so that you can learn to become an effective astro-trader yourself.
Q: I’m interested in figuring out the synodic cycle of planetary pairs – in other words, the cycle of relationship between various pairs of planets. My goal is to see if there are any correspondences with business cycles and stock market cycles. Is there any easy way to figure out what these cycles are?
A: Just take the individual orbital periods of the two planets in question and subtract the smaller from the larger. Then divide the resulting remainder into the product you get by multiplying the two orbital periods together.
For example, the orbital period of Saturn is about 30 years, and the orbital period of Jupiter is about 12 years. So the Jupiter/Saturn synodic cycle is about 20 years: (30*12)/(30-12) or 360/18 = 20.
Uranus has an orbital period of roughly 84 years, so to find the Jupiter/Uranus synodic cycle we would take (84*12)/(84-12) or 1008/72 = 14 years.
Starting Points for Planetary Cycles
Q: I have been studying Financial Astrology for several years now and have come a long way on my own. However, there is one thing that I have not been able to find an answer to. How does one tell where the major cycles begin? I am talking about the Saturn cycle of 30 years, and the Jupiter cycle of 11.87 years. If I could tell where they begin then I could also figure out when and where they end. It must be simple, but the answer has eluded my best efforts in study. I know there is an ingress cycle from house to house, and also a synodial cycle with planetary conjunctions, but there has got to be a way to tell when these larger cycles begin. (Original question submitted by Mike Case).
A: By their very nature, planetary cycles are perpetually repeating, and thus have no beginning or end. We measure them like any other cycle: in the classic example of a sine wave as a cycle, we can measure from crest to crest, or from trough to trough. We simply find a point at which the cycle begins to repeat. With planets we can certainly reckon on the basis of ingresses or synodic contacts, as you suggest. In Financial Astrology we can also superimpose the planetary cycles on the action of the markets; we can take, for example, a significant high or low in a market, note the position of a particular planet at that time, and then find the previous occasion when the planet was at that position. This gives us a complete planetary cycle with an intrinsically arbitrary beginning point, but it is nevertheless a frame of reference which we can usefully apply to our market analysis, with or without other modifying factors.
Transits to Eclipses
Q: I’ve been looking at the market impact of transits to eclipse points, but I don’t know what kind of orb to allow. What do you suggest?
A: If you’re looking at the impact of an eclipse itself, then an orb of about 3 to 3.5 degrees seems to work best. But when I work with transits to an eclipse point before or after the actual date of the eclipse, then I use a much tighter orb – about 1 to 1.5 degrees.
Matching Stock Picks to Personal Horoscopes
Q: I’ve heard that I can make more money in the stock market if I just trade stocks that are compatible with my natal horoscope. Is this true?
A: In many cases, the answer is yes. I have personally found that it is more important to avoid trading stocks that have major clashes with your natal chart, or ones whose First Trade charts trigger some of the psychological booby traps featured in your own natal horoscope.
This notion of compatibility is certainly a valid one, but it should be approached cautiously nevertheless. If you find a stock with a First Trade horoscope that is compatible with your own chart, sometime the tendency is to “get married” to the stock and hold it indefinitely, regardless of what the market is doing. That may make for a great relationship, but it’s not necessarily the best way to make money. Just be clear about what your goals are if you want to avoid being blind-sided.