Cycles - A place to start - The most important point is this - "Cycle analysis helps us to determine where we are in the current cycle to help steer us towards a higher probability set-up that matches our risk tolerance."
The comment above is why I track cycles. I trade using the ma's and some other tools. ( I'm a trend trader)
Cycle Trading Guidelines
Cycle analysis helps us to determine where we are in the current cycle to help steer us towards a higher probability set-up that matches our risk tolerance.
The ideal time to buy is at a cycle low.
* There are 4 cycle lows that we look for:
– The daily cycle low = (DCL)
– The intermediate (weekly) cycle low= (ICL)
– The yearly cycle low (YCL)
– the multi-year cycle low
– The status of the yearly & multi-year cycles are the back drop as we monitor the interaction of the daily cycle with the intermediate cycle.
* Generally a swing low in the cycle’s timing band for a low has good odds of spotting the cycle low.
* Place Stop below the cycle low.
* Further confirmation arrives with a break of the declining trend line.
* The yearly cycle low provides the best opportunity of the year for gains.
* Next the intermediate lows (2 or 3 times per year) provide the next best opportunity for gains.
* Followed by the daily cycle low (2 to 4 per weekly cycle).
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Daily, Intermediate, Yearly Cycles
A cycle is a series of prices that have a definable peak surrounded by a low point on both ends. The three cycles that we discuss are the Daily, Intermediate (weekly) & Yearly Cycles
A series of daily cycles comprise an intermediate cycle. A series of intermediate cycles comprise a yearly cycle. Cycles are measured from cycle low to cycle low.
The Daily Cycle
The smallest cycle that we discuss is the daily cycle. The daily cycle averages about 20 – 25 days for the dollar, gold, the Miners, the CRB and bonds. The equities daily cycle runs about 30 – 45 days. Three to five daily cycles tend to comprise an intermediate cycle.
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