Successfully predicting price action & market behavior is the goal of all traders.
Forecasting a stock's future movements is ultimately the key to trading.

Your predictive abilities ultimately determine your success, whether you are day trading intra-day setups, or investing for the long term.

One way traders can refine their understanding of trading is to learn of potential influences.
One area of research and study is done by finding correlations between natural forces and trading psychology. Traders can often improve their performance if they can see the links and clues science can provide. By studying the natural forces in our environment that affect trading psychology, we can be more open to seeing patterns in the markets. Sometimes opening yourself up to exploring new relationships can improve your trading.

A couple of white papers (research) that have been useful to traders are cited below.

These papers are widely available on the internet for free and in easy to read PDF formats:

1) Playing the Field: Electromagnetic Storms and the Stock Market by Krivelyova & Robotti is a publication from the Federal Reserve Bank of Atlanta in 2003. The subject matter is solar magnetic storms and the geomagnetic effect on investor mood, judgments, and risk behavior.

2) Sheer Lunacy staring at the Heavens published by Royal Bank of Scotland in 2010.
This paper presents a study of the correlations between lunar phases & the behavior of financial markets.

Students of cycle analysis will want to read both of these papers.

Following and identifying the various lunar cycles, sunspot cycles, and electromagnetic storm activity in the age of the internet is easy enough but developing a record of correlated market activity on a day-to-day basis is a little more tedious, and a lot more difficult.

We have found that traders who keep a monthly calendar & trading diary can utilize these observations as an essential tool in the analysis of trading correlations of the kinds of phenomena discussed and written in these science-based papers.
Traders have found success by utilizing science-based theories (as in the research above) to find correlations with the Securities and markets they trade. Traders are able to develop a trading strategy (based on enough historical data points) with improved risk/reward characteristics tracking these cycles.

Science can provide clues indeed.




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