Analysis and Trading based on Envelopes, Waves, Cycles

Using Envelopes is the best system :

You can classify and hierarchize

Waves
Cycles
M and W patterns
Harmonic Patterns

as long as you do not classify and hierarchize these representations of Price Action :

- your Analysis is flawed
- your Trading decisions are flawed

moreover using 3 Envelopes you can observe the eventual "propagation" = when a Wave becomes a Wave of higher degree, nature, order

DAX 5 Days / 5 minutes

Closed Short position + 38 points

DOW 5 Days / 5 minutes

On Going Long

DOW 5 Days / 5 minutes

Closed Long position + 44 points

Trading is very simple and basic

a good tool : after an Uptrend either Price action go Sideways or Down

On Going Short on the Dow

DOW 5 Days / 5 minutes

Closed short position + 29 points

Trend Following System vs Return to the Average by Sergei Tarasov (Timing Solution)

Food for Thoughts

hello Parisboy,

many thanks for your insights and sharing.

Hi, I've just started trading, could anyone tell me what envelopes, waves and cycles are?

parisboy,

it seems that you have stopped your EW studies after the 1st pages of the EW rules.
The most interesting and difficult studies are the Corrective patterns.

Sixer

I saw that you are in France John Smith sounds typically french !

you should first read the thread which is very technical. you will find there answers to most of your questions

PB, in which of Gann's books does he describe and explain his system of octaves?

Bienvenue Jean-Smith ,
@Parisboy, may be he should learn first the basics of trading.
If he is brand new, he surely doesn´t know what is a candle, time frames, how to read a chart and so.
Better start here and come back when you re ready, John Smith:
https://www.babypips.com/learn

Haha coming from someone who lives in France and calls himself Parisboy, I guess you know what being typically french is.
I'm reading it now

I do not remember yet. Need to check . Intuitively I would said in none ! More sparsed remarks here and there. But no description like for "Gann Angles"

IMHO I am the best known public source on the subject !

BTCUSD
I have a divided mind when it comes to this unusual instrument. First, it defies Hurstian cyclical analysis no matter what the overconfident denizens of the (sadly defunct) Hurst cycles forum might say. The range expansion is so large and swift that it pummels developing cycles before they can fully form. Hopefully my diagram can illustrate this.

However my bezier bands are detecting what might be a longer-term turnaround. As Millard advised, an unusual bulge in the range of a fixed width band is often an early warning sign. I guess we will know in time. This is one reason I wish to learn more about Octave theory as I am not well-versed in Gann's theories and maybe it is more useful than simply using a cycles+bands approach.

The only cycle on which it makes sense to analyze BTC is the 2 year (and possibly higher except that there is insufficient price data to analyze over such timeframes) and you can see that it is following the 2y angle and path very closely.

see my posts 1929 and 1930 page 97 on this thread

the best on the subject

The great French mathematician (and polymath) Benoit Mandelbrot warned of the difficulties in using moving averages to analyze volatility regimes in his important work, 'The (Mis)Behaviour of Markets'. A MA band that offers good signals does so only when price has some semblance of stationarity and when the price wave 'propagates' to a higher dimension the only way to make sense of the scaling is to re-examine price on a higher dimension. Then the moving average (ideally, moving average band) will again be relatively stationary in relation to price/time.

Mandelbrot advised using a different type of moving average, the 'volatility moving average' which adjusts itself whenever price moves beyond a fixed standard deviation. I believe he said 2 StdDev but of course it is important to be able to adjust the cutoff.

With the assistance of a good programmer I have co-developed such a 'VMA band' and offer it here in case it will be of interest or usefulness. I find that it is already improving my reversion-trading strategies.

I also offer a template that mimics as closely as I could manage the 32/128/256 TPU measures of Alain's system on EURUSD on the H1 & D1 MT4 TF. Of course a different template will need to be adjusted for any other TF and instrument and the numbers can vary wildly. I would be grateful for anyone who uses these tools on another instrument (or improves my calculations) to offer their refinements.

update: small edits and all files re-uploaded