Cycle Trading

From my 4x made hard journal, I posted a squaring of a time range. That post actually belongs in this thread.

I also mapped out a series of equal or equivilant ellipses and found a perfect fit for the current ellipse. 7 points of contact not including the last few bars that are adhering to the curviture of the upper section of the ellipse. The magenta trend lines forming the larger triangle also converge at 180° of time. The magenta dotted vertical is based off of a price squaring.

9/13 proved correct. 9/15 is a natural cycle date. but since 9/15 is a saturday, it'll either play out monday or may have already played out meaning price could have made a minor bottom.

I'm short pound. didn't short euro becuase the rest of my tradeable capital is tied up in guppies.

From previous posts, I'm looking to hold until 9/17 to 9/18 area for time and price in a window of 1.9820 to 1.9867.

What indicator are you using to forecast the cycles?

What is the best way to use that Gann square to show cycles?

Thank you

Go to my blog. The link is in my signature. I show how to do various Gann squares/grids using the metatrader tools.

The mt4 cycle tool is pretty useful. I've got cycles going back years that are still in sync.

I look for a lot of cycles. Probably too many. The most basic is just fib bar counts. I came up with a date to short based off of fib counts. But there were some natural cycles due on 9/13 as well. Also geometric cycles similar to Gann squaring. I really need to narrow it down and simplify things. Too much info sometimes.

I worked up a Gann Square of 360 and saw a reason to get out of the shorts for now and free up some capital for some other setups I'm watching.

I've got orders ready for more pound shorts should it break further south anytime soon.

Here's the method I used to short the crap out of the pound. I got out a little early, but I knew I wasn't going to be able to watch from work

http://img210.imageshack.us/img210/8...ep10ie1.th.gif
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I've been pretty busy with school and work so I took a break from trading.
However, I had a little time this weekend to do so looking and shorted the pound based on a few things.

First up is a Gann natural cycle. The indicator in the bottom window shows a sine wave looking thing and I've highlighted the peaks and troughs. Right now price is curving and so is price. There's a also a bigger curve to the wave and it is also pointing down.

Second up is another series of natural cycles that has proven to be accurate over the years. I don't recall exactly where I got it from, but the author called it a univesal clock.

I took a year from watching charts to focus on school and some other things. I haven't logged on to the Factory here in ages. Lots of changes, new faces, etc. I thought I'd post a few trades here in my journal to show some cycle and time based trades to contrast the myriad of indicator based journals.

I use a lot of techniques.. Gann, geometry, price-time cycles, natural cycles, etc. But when it comes down to it, the most important part is price meeting up at support/resistence at the right time.

S/R can be in any form. Trendlines, pivots, fibs, swing highs/lows, etc.
Time can be based on fib bar counts, squaring the circle, harmonic divisions, natural cycles, etc.

The idea isn't to predict the future.. it is to know when the future has arrived and risk accordingly. A lesson hard learned on my part.

The most recent trade:

On Thursday I shorted the Euro based on a 4h triangle forming. Normally, I don't like trading inside of consolidation, but on the 4h there is usually sufficient range for swing trading. Especially the past few weeks where the daily ranges on the Euro are over 200 pips. Initial entry was based on the trendline as well as confluence from price-time squaring analysis.

Through the Euro session into Friday, price fell into a channel on down to the 50% area and bottomed on one of my time points. A very profitable start and a good place to exit. However, the plan was to swing trade the larger pattern. I figured price would meander on back to the 23.6 or 11.4 for a setup to add on to the short. Again, being a swing trade, I wasn't too concerned about the retrace eating up the profit of the 1st position because the 4h pattern is strong.

Price congested at the 50% mark after time and there were no signals when price reached the minor time lines. Price finally busted on through the 23.6 with gusto and that made the next time marker the key time marker. I used a trend line cross on the 15 min. as a time mark which also coincided with a 13 bar count from the recent low on the 30 min. Remember, time lines are most important when price is falling or rising into them for 5-8 bars or more.

When price breaks through a key resistence/support area with gusto against the larger pattern or trend, it is many times a false breakout or pattern failure. I was not shaken out because there was still one more key Fibonacci level of resistence. Also, price had gone parabolic. I didn't draw it on the screenshots, but it's plain as day. See if you can see the parabola. Parabolas are nice setups because what goes straight up must come down in time related to the angle of ascent.

When price reached the price level right at time I didn't even wait for a closed candle. This setup is like getting AK and then flopping a full house. 11.4 and it's 88.6 opposite are relatively unknown fib ratios but they're so powerful when they hit. Combined with the 13 bar count, there is no choice but to short. Based on time, I'll be holding on for possibly 3 full trading days and watching for more price-time squaring or key levels of support to fall to add on. A pretty good ending at the end of trading Friday.

http://img98.imageshack.us/img98/3356/euro0.th.gif
http://img98.imageshack.us/img98/1817/euro1.th.gif
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http://img98.imageshack.us/img98/6273/euro3.th.gif
http://img98.imageshack.us/img98/4190/euro4.th.gif

Euro update: Added to the shorts.

Wed's CPI or PPI or whatever it was triggered my stops. The spike up peaked right on my timeline before dropping down into another time line. So out of all of that, 2 good winners, 1 loser, 1 b/e. Target ended up being achieved on all time frames today without me. That nice runup was a clever way to take out stops, eh? Such is trading.

http://img248.imageshack.us/img248/7...15Nov19.th.gif
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While I was sitting around doing some Sunday stuff, I saw a setup on the 15 min. GBPJPY that was too good to pass up. First screen shot shows the setup of price at a Gann angle coming up to a division of time. I marked the price targets in magenta. Second shot is the entry bar. Third shot is the payoff. 80 pips or so. Again, the nice thing about trading time is that I had about 2 bars or 20 minutes or so before I felt the need to watch for an entry. I set an alarm and actually forgot about it while I was doing some other stuff. Came back to the shot, saw price square up at time and shorted no questions asked. Set another alarm for a couple of bars short of the next time marker and went on about my biz.



http://img211.imageshack.us/img211/9...15Nov23.th.gif
http://img211.imageshack.us/img211/8...16Nov23.th.gif
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Shorted Euro and GBPJPY earlier today near their respective tops. Exited a little while ago.

Euro entry was based on Gann 180*. GBPJPY was a division of time off the top. Exits were time and price level. Plus, too tired to stay up watching them.

http://img384.imageshack.us/img384/4...35Nov24.th.gif
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JR97,

Would you be so kinda as to explain what you mean by price-time squaring?
I've heard a few variations right now.

Would appreciate to hear the view of someone like yourself who uses it for trading.

Thanks
Cy

Price and time squaring means price reaches an intersection of a division of price and a division of time. For example, it's common practice to divide a range of price by fibonacci ratios. 50%, 61.1%, 23.6%. But time can also be divided into ranges. So maybe I choose 360 based on the circle and then divide that range. So I'd have verticle lines at 360, 180 (50%), 120(33%), and 240(33%). If price arrives where any of these lines cross, it's a squaring. Like price retracing 50% in 180 bars(50%). Where and when that happens, I'd expect a price reaction.

Finished up the office work and threw up a GBPJPY 5 min. chart and put on some quick cycles. Price and time were just barely converging so I looked to scalp some quick 30 pips or so between pivots. A nice little pip snack before heading home. Note how dead on the red cycle lines picked some major turns. Knowing the next instance of time makes trading so much easier. No need to sit and stare at the screen wondering when a move might happen. Price is only 1 of 2 axis on the chart. Using both only makes sense, eh?

Whilst all of us are familiar with the Fibonacci Sequence, few have heard of The Lucas Sequence - named after Edouard Lucas, the French mathematician whose work in the late 1800s was largely responsible for the upsurge in interest in Fibonacci.

The sequence - 4.7.11.18.29,47,61 etc seems to be more in tune with many market turning points than the more common Fibonaccis.

Now that I've found this thread I'll work up a few more examples and see if we can find some consistancy....I'm thinking that certain pairs / or times in the calendar may work with a good degree of accuracy, whilst others may need to use fibos....again, some TFs will be more accurate than others

My own preference is for a KISS solution for attempting any type of predictive work - I'm just not capable of making some of the more esoteric studies fit into my oun trading - but I'll follow them with interest...

Awesome chart, Islander. I am familiar with the Lucas series but haven't done much work with them. I've got a half dozen articles about them on my ever growing to-read pile. Inadvertently, I've used some of the numbers as cycles but mainly because that's what the chart yielded vs applying the numbers as Lucas numbers.

Another interesting series is what is called the Fib twin series or Fib numbers doubled.
1,2,3,5,8,13,21,34,55,89,144 etc would twin up as 2,4,6,10,16,26,42,68,110,178,288, etc.

I've got a blog article in the works going into my research on number series. One of the things I've found is that any number can yield a cycle in both price and/or time. For time, the key is the cycle start or at least finding a node. For price cycles, almost anything can be used. The key there is harmonic proportion and/or even divisions. For example, I checked out that Fibonacci framework work by niceguy. Essentially, all he's doing is creating partitions of .618 which is almost a 7th. Gann does 8th's and 3rds. You could do any even division and get results because the key is the the start and end. You could 12.3456's if you wanted. This also applies to growth series and decomposition as well. I think Cowan hammered the point home in an indirect way.

Long Euro at 1.2669. Target is price and time at 1.2745 and 12-1-08 18:15 GMT. If that hits, I'll show my cards. If it misses, there's nothing to see here.

Revised. Perfect 360 squaring. New entry at 1.2616. Time and price target are now 1.2797 at 12-2-08 8:20 GMT. Damn near stopped out on the initial entry. Tightened up the stops. I shouldn't have entered last night based on 1 condition alone. I usually try to have at least 2 conditions.