Cycle Trading

Nice analysis, Doli. I'm short as well.

Daily Chart.

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I did quite a bit of fine tuning on the fancy wavy line forecast tool settings. I took a heliocentric synodic cycle and did some number crunching to apply it to intraday. First up is the GBP/CHF 54 Min. chart. The magenta is a 5 wave composite. The yellow is a 4 wave composite to sort of smooth it out.

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The chart below is a 3 wave composite on the 48 min. chart.

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There's quite a bit of tuning to get these to work. Not only the numbers that go into creating the forecast composite, but also applying them to what time frame and where to anchor. I think I've finally come across the best settings for a universal "shape". This same ship fits the Dow Jones like a glove as well. I'm trying to round up some new data to show this on a monthly chart.

EUR/USD 42 min.

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Short. Daily square top of the trend line. Wolfe Wave setup?

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Euro still moving up. But end coming soon? Dollar rally in the works? Dollar Index daily chart:

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Hourly parabola and mirror forecast.

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Daily parabolas and mirror forecast.

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http://www.huffingtonpost.com/2012/0...n_1464835.html

Dollar Index Update. Moving on up as forecast.

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Update. Price has been pretty erratic, but it's been erratic in the direction of the cycle.

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Euro 120 Min. chart. Because the source data is 30 min. bars, I can't fine tune down to the minute with this one. Price is still following the pattern well, though.

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My entries:

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The thing to note about that Gann Square chart is that the chart isn't anchored to price highs/lows but to a square root range. Even with that whack idea, the 1x1 line held.

I had originally guessed price was going to drop a lot sooner as I showed in an early screen shot. I was obviously wrong, but the square is obviously right,.

Here is a GBP/CHF example of the anchoring the square to square roots. Notice how price hit bang on to the top of the square? The top of the square is anchored to a forecast high which is that little dip in the gray line. There was a lower dip and I'm guesstimating that price level as the end of square price level.

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Here's my Dow Jones forecast through the beginning of 2013. My forecast actually runs out to 2015 but you'll just have to wait until then to see it. The thing to note here that the red forecast at the top is astro based. No.. it's not the Bradley. That thing sucks. The magenta forecast is my fancy wave forecast. They're in agreement for the most part which was interesting to see. Fractal nature of the universe.

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Below is where I took the magenta forecast and applied to mt4. Very interesting results as the swings fall in time exactly on divisions of the gann square. I adjust the magnitude of price to fit the square, but that's just me guessing.

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Tested a new theory on a random low on a daily euro chart. I chose the low on 6/7/10 just because it was substantial. There was only a single measure of the anchor low to the next low. The new formula spit out a bunch of values that I plugged into the fancy wavy line indicator and this is the result:

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The inspiration was from a 17.3 yearly cycle. That's not exactly practical to trade so I put some thought into how to adjust down to a daily chart. It should apply to any time frame. I'll play around some more this weekend. Major headache.

Anchored to the low in 2001. Not bad for a 12 year forecast, eh? Only one of the major lows was an inversion.

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I posted about the wavy line forecast in a thread in the trading discussions area and got a lot of flack as you'd expect. But I was also asked in some pm's how you'd trade this even if it were possible to forecast like this. Below is a chart of the EUR/USD 300 min. Don't ask on why 300 min. Too long to explain.

Even without the forecast the easiest way to trade is to just trade higher highs and higher lows in an uptrend and lower lows and lower highs in a downtrend. ONLY taking trades in the direction of the trend. In an uptrend if a previous high is not taken out and a previous low is taken out, then that's a change in trend and you only look to sell lower highers.

Below is a chart with some examples. I'll describe the notable examples:

1 - This low occurs after the forecast low and is higher than the previous low.
2 - Pull back low
3 - Lower high coming in at the forecast high.
4,5,6,7 - Lower pull back highs going into the forecast low which came in on time.
8,9 - Pull back lows
10 - Pull back low. Even though this low is after the forecast high, the trend rule is still in play until a low is broken and/or a high isn't broken.
11 - Pull back high well after the forecast high. Don't forget charting fundamentals such as trend lines and s/r. Knowing that there's a major trend line coming up it's a pretty easy change in direction target without the forecast.

I've marked off a couple of areas where I'll be looking for pull back highs to go short. My actual order entry areas will based on a 30 min. chart using whatever method and technique paints the clearest picture for logical entry and stop placement. But as I stated.... even without the fancy forecast, just trading in pull backs in the direction of the trend should keep you on the right side 90% of the time. Even if you blow an entry, the trend can save you. And as I've stated time and time again... it's not about predicting the future, it's about knowing when the future has arrived and risking accordingly. Actually Larry Psevanto said it.

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I should add that the low at point 10 hasn't been taken out, so technically there's the chance the uptrend is still in tact. For that to be the case, the next high would need to break or at least match the previous high near point 11. I'm not sure that is likely hence why I'm looking for the next pull back highs to be lower and shorting opportunities in the direction of the forecast. Plus, I've got a few other things showing to look lower as well.

Dollar Index update. Price rose straight up to the red 1x1.

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The dynamic nature of time. If you're familiar with the general law of relativity, you're familiar with the concept that space-time is effected by gravity and therefore things such as time here on the earth is different than if you were out in space. Another concept Brad Cowan talks about in his 4 Dimensional Stock Market Structures and Cycles is that price-time can be mapped out on the faces of rotating platonic solids. And as these face rotate into our point of observation, they can sometimes be at a different angle thus what was a 52 week cycle on one face of the solid is now a 48 week cycle on the face we're currently observing. If you partition the sub-cycles, they'll slowly change length because we're looking at what is essentially 3 dimensions mapped out in 2 point perspective. Remember doing 2 point perspective drawings in elementary school? Anywho, I'm going to show something interesting that shows the dynamic nature of price-time.

The charts below are the EUR/USD and the magenta wavy is my fancy wavy line forecast.

The first chart is an 8 min. showing 1 cycle of the forecast with the primary cycle emphasized. Price followed the forecast pretty well.

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At the end of this cycle, I advanced the wavy line forecast and theoretically it should fit. But it didn't. However, using a 10 minute chart fit this cycle. I made no changes to the wavy line. Just moved it forward.

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Advancing to the next major low the 10 min. chart fits like a glove. The only adjustment made here was to emphasize twice the primary cycle to account for the major uptrend.

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Advancing to the next cycle low and the 10 minute isn't even close. But the 12 min. is? Actually I think something like an 11.45 min. cycle would have fit better, but I can't chart that.

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Mid-way up and the 10 Min. is working again:

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After the high, I believe price is in a down-trend. So I inverted the forecast and will now map high to high cycles. The 12 Min. cycle is looking good so far.

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The pattern is exactly the same in all of the screen shots. When I adjusted the amplitude, that only effects the slope. The humps/bumps all stay in place.

So if the unit of measure of our ruler.. the wavy line stays the same, then was time dynamic or was price dynamic? The answer is "yes". If space and time are the same, then price and time can be treated the same. In these charts I adjusted time to fit the static wavy line. The other option is to leave time static and change the scale of the wavy to be shorter or longer. Just something to think about.

What does that have to do with trading? Nothing. Just something cool to think about besides order flows, news events, and support/resistance.