CHAPTER 1

Astrology Basics forthe Market Trader

Astrology is an ancient science that describes the influence of the planetson events of nature and behaviour of mankind. This ancient science isrooted in thousands of years of observation across many civilizations.

• The ancient Sumerians, Akkadians and Babylonians between the4th and 2nd centuries BC believed the affairs of mankind could begauged by watching the motions of the stars and planets. Theyrecorded their predictions and future indications of prosperityand calamity on clay tablets. These early recordings form the veryfoundations of modern day astrology.

• Ancient Egyptian artifacts show that high priests Petosiris andNecepso who lived during the reign of Ramses II were revered fortheir knowledge of astrology. The Egyptian culture is also thoughtto have developed a 12 month x 30 day recordation method fortime based on the repeated appearances of constellations.

• Ancient Indian and Chinese artifacts reveal that astrology hasheld an esteemed place in those societies for many thousands ofyears.

• Hipparchus, Pythagoras and Plato are revered names fromthe Greek era. Historians think Pythagoras may have assignedmathematical values to the relations between celestial bodies andPlato may have offered up predictions relating celestial bodiesto human fates. Hipparchus is thought to have compiled a starcatalogue and in so doing was the first to popularize astrology.

• During Roman times, astrology and divination were used forpolitical gain with important military figures surroundingthemselves with seers and diviners. Ptolemy and Valens standout from the time of the Roman Empire as writers on astrology.In 126 AD, Ptolemy penned four books on the influence of thestars which collectively are called the Tetrabiblos. In 160 AD,Valens penned Anthologies in which he further summarized theprinciples of astrology.

But, following the conversion of Emperor Constantine to Christianity, in312 AD, divination and magic became a crime according to the Churchand astrology began a slow retreat to the sidelines where for the mostpart it remains today. However, despite this sidelining by a Church seekingto protect its authority, astrology has been used in more modern historyby leading thinkers such as Galilei Galileo, Tycho Brahe, Nostradamus,Johannes Kepler, Sir Francis Bacon, Isaac Newton and Benjamin Franklin.Indeed we owe much of our current state of scientific advancement tothese brave souls who refused to let astrology fade away and become adistant memory.

The Zodiac

In our solar system, the Sun is at the center. The Earth, Moon, planetsand various other asteroid bodies all collectively comprise our planetarysystem. The various planets and other asteroid bodies rotate the 360degrees around the Sun following a path called the ecliptic plane. Picturea gigantic band that encircles the 360 degrees of the planetary system.Divide this band into twelve equal portions of 30 degrees each and theresult is what astrologers call the zodiac. The twelve portions of thezodiac all have names including Aries, Cancer, Leo and so on. If thesenames sound familiar, they should. You routinely see all twelve namesin the daily horoscope section of your morning newspaper. The startingpoint or zero degree point of the zodiac sign Aries is deemed to be at theSpring Equinox of each year as shown in Figure 1-1.

Geocentric and Heliocentric Astrology

Astrology comes in two distinct varieties—geocentric and heliocentric.In geocentric astrology, the Earth is taken to be the vantage point forobserving the planets as they pass through the signs of the zodiac.Owing to the different times for the various planets to each orbit the Sun,from an astrologer's vantage point on Earth, it appears as though fromtime to time certain planets make distinct angles (called aspects) with oneanother and also with the Sun. The aspects that are commonly used inastrology are 0, 30, 45, 60, 90, 120, 150 and 180 degrees.

In heliocentric astrology, the Sun is taken to be the vantage point and toan observer positioned on the Sun, it likewise appears as though variousplanets are making angles with other planets from time to time.

I use both types of astrology to compliment my trading activity, but Ido find I am slowly developing a preference for the heliocentric variety.This may be because it is a bit cleaner than the geocentric method, forheliocentric astrology does not worry about features such as Ascendant,Descendant, MC and IC. Most of the examples you will see throughoutthis book are based on geocentric astrology, but you will also see howheliocentric astrology plays a role in trading the markets too, especiallywhen it comes to commodity futures. After reading this book, I encourageyou to take a look at both methods. Like me, you will probably find thatyou start to develop a preference for one method over the other.

Ascendant, Descendant, MC and IC

As the Earth rotates on its axis once in every 24 hours, an observersituated on Earth will detect an apparent motion of the zodiac.Astrologers further apply four cardinal points to the zodiac, almost likethe north, south, east and west points on a compass. The east point istermed the ascendant and is often abbreviated Asc. The west point istermed the descendant and is often abbreviated Dsc. The south pointis termed the Mid-Heaven (from the Latin Medium Coeli) and is oftenabbreviated MC. The north point is termed the Imum Coeli (Latin forbottom of the sky) and is abbreviated IC. These cardinal...