Financial markets are governed by recurring cycles having similar characteristics. There are multiple cycles acting at any given point of time and so using only 1 single cycle can result into failure of time projections. The most basic parameters of cycles include amplitude, period and phase.
J.M.Hurst suggested that there are certain standard cycles which are universal and can be applied on any asset classes. Many cycle analysts often complain that cycles vanish without giving prior indication. The major reason being interaction of different cycles of varying magnitude.
The principles of Nominality, Harmonicity and Synchronicity are the building blocks for Hurst cycle analysis. Hurst observed that longer cycles are multiple of shorter cycles usually by the factor of two.
As per Hurst Nominal model there is 54 years cycle followed by shorter 18 years and shortest 9 years at same degree of magnitude.
On a lower scale there is 9 year cycle that divides into two 54 months cycles which further divides into three 18 month cycles that further divides into two 9 months cycles.
Going further low, we then have 80 weeks, 40 weeks, 20 weeks and 10 weeks cycles followed by 80 days, 40 days, 20 days and 10 days.
The above different magnitude of cycles simply reflects that using only 1 single cycle for forecasting Time can be extremely challenging. The subject might look complicated but it is no different than Elliott wave principle. The major difference is Hurst Cycle analysis helps us topredict time and Elliott wave focuses more on price. This element of time can help us to forecast the Elliott wave pattern that can form in future. If you understand the logic at one level of degree, identifying and analyzing the cycles at higher or lower degree becomes more mechanical and easy.
Nifty daily chart (Applying Neo wave and Hurst Time cycles)
The trendlines shown in different colors is based on the cycle analysis. Yes, this concept of drawing trendlines based on cycles is known as Valid Trendlines (VTL). It simply highlights whichtrendlines are important and should be used when there are multiple possibilities. Ever thought why break of few trendline does not produce any momentum whereas at times we see a serious capitulation?
The above chart of Nifty is marked with only 55 days (trading days) cycle but the bottom section shows phasing analysis done and highlights different (calendar days) 20 Weeks, 80 days, 40 days, 20 days and 10 days cycles. Applying cycles of so many degrees ensures higherprobability in terms of time and applying Advanced concepts of Elliott wave (Neo wave) ensures high probability in terms of price. Combining both of these methods can give a lethal combinationof most advanced concepts of applied Technical analysis.
However, one should understand trading and investing is the entire game of probability and Risk & Money management strategies play vital role. Markets are created and moved by complex species – human beings and analyzing the sentiments is never an easy task. But the daily challenge is the reason why it is always interesting and keeps everyone on toes all the times!
Join US for the 2 days training workshop to be held on 11th & 12th October in Mumbai on the most advanced concepts of Technical analysis - Neo wave (Advanced Elliott wave) combined together with J.M.Hurst Time cycles – a powerful tool to forecasts Elliott wave patterns using Time cycles – A complete different way to look at market behavior, forecasting and trading!!!
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Where and when is the course?
The training is at Hotel Grand Sarovar Premiere, Goregoan, Mumbai on 11th-12th October 2014. This belongs to 5 star category having chain of international hotels and the fees are including Tea / Coffee and Lunch.
The charges for the Training are Rs. 18000 + 12.36% Service tax. If registered after 20th September 2014 charges would be Rs. 22000 + 12.36%Service tax
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