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Attachments: Analysis and Trading based on Envelopes, Waves, Cycles
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Analysis and Trading based on Envelopes, Waves, Cycles

  • #2,181
  • Jul 13, 2019 6:14am Jul 13, 2019 6:14am
GOLD 30 mn
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  • #2,182
  • Jul 13, 2019 6:16am Jul 13, 2019 6:16am
GOLD 60 mn
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  • #2,183
  • Jul 13, 2019 6:20am Jul 13, 2019 6:20am
GOLD 120 mn
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  • #2,184
  • Jul 13, 2019 6:22am Jul 13, 2019 6:22am
GOLD 240 mn
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  • #2,185
  • Jul 13, 2019 6:27am Jul 13, 2019 6:27am
GOLD Daily
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  • #2,186
  • Edited 8:15am Jul 13, 2019 7:59am | Edited 8:15am
Do we need sophisticated mathematical tools to analyze Cycles ?

Let’s look at the first Nominal Model described in Hurst’s book, “The Profit Magic of Stock Transaction Timing”.

Hurst derived his timingmodel from a Fourier analysis and a digital discovery algorithm.

In 1970 nobody was able to perform a spectral analysis if he was a basic investor, a "retail trader" of today.

Let's analyze Hurst's table.

a) the Spectral Model shows a 5,7 years frequency (Cycle) = the red cartouche. Hurst does not take into account this Cycle / Frequency in his Model.
This is strange , because the FSC (Foundation for the Study of Cyles) has always written that the 6 Years Cycle was one of the most important of the Market

b) the Spectral Model shows a 3 Years Cycle / Frequency = the orange cartouche = average of 3,4, 2,9, 2,4 years = 2,9 years

c) in green Hurst considers it exist a 18 months Cycle / Frequency , but with only one occurence (18,7) but leaves aside the 3 occurences (25,7, 22,8, 20,6 months - why ?)

d) you can observe the 12 months "cycle" in black, the 9 months "cycle" in blue and even the 6 months - but observe the other frequencies that Hurst has left aside
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  • #2,187
  • Jul 13, 2019 8:26am Jul 13, 2019 8:26am
IMHO Spectral Analysis is of little use when you determine cycles.

This because a lot depends on how you sort, classify and aggregate the results
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  • #2,188
  • Jul 13, 2019 9:54am Jul 13, 2019 9:54am
The 6 Year Cycle in Stocks ( Cycles - May 1966)
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  • #2,189
  • Jul 13, 2019 4:21pm Jul 13, 2019 4:21pm
Quoting Sixer
clemmo17, pls. take into consideration that the Gold Matrix count you have presented in post #2175 is not correct. Copan used for all underlyings the S&P count as basis with 11 turning points for the MC2/MTD time frame. BUT: The Delta soultion for Gold has 10 turning points for this time frame (plus inversions). I have added the MC3/LTD solution (black) too fyi. Sixer Edit: The Delta count indicates an important High at the end of 2019 --> the completion of wave [b] {image} {image}
Is it fair to say the Delta theory has advanced since Wilder/Sloman first published it?
  • #2,190
  • Edited 2:43am Jul 14, 2019 1:31am | Edited 2:43am
clemmo17,

the problem which Copan had/has is the Wilder patent of the Delta Phenomenom !

Copan has sent me a very angry mail 15 years ago and mentioned that he invented a complete new stuff ...
But Copan is still a director of the Delta society.

Sixer

Edit:
Compare the Delta and Matrix solution(s) for the S&P
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  • #2,191
  • Jul 14, 2019 8:28am Jul 14, 2019 8:28am
Market Matrix from Steve Copan

http://www.tradersdaytrading.com/market-matrix.html

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  • #2,192
  • Jul 14, 2019 8:01pm Jul 14, 2019 8:01pm
Hurst cyclic Analysis using nominal model
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  • #2,193
  • Jul 15, 2019 4:11am Jul 15, 2019 4:11am
DAX Closed Short position + 20 points
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  • #2,194
  • Jul 15, 2019 5:07am Jul 15, 2019 5:07am
DAX Closed Short position + 10 points
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  • #2,195
  • Jul 16, 2019 8:16am Jul 16, 2019 8:16am
DAX Closed Short position + 14 points
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  • #2,196
  • Jul 17, 2019 12:50am Jul 17, 2019 12:50am
Quoting Sixer
clemmo17, the problem which Copan had/has is the Wilder patent of the Delta Phenomenom ! Copan has sent me a very angry mail 15 years ago and mentioned that he invented a complete new stuff ... But Copan is still a director of the Delta society. Sixer Edit: Compare the Delta and Matrix solution(s) for the S&P {image}
It seems to me that whenever fixed cycle terms/durations are used that some form of cleanup/stutter-step/adjustment is usually needed to make it consistent with actual price movements.

This is why I think (so far) bands are the ultimate technical analysis tool since they account for both price and time despite any irregularities with the price wave. Once price has retreated from a band edge we assume the old cycle is complete and the new one begins. If price cuts through a band like a hot knife through butter we assume we're dealing with an expanding/ larger cycle. This does not require price to obey any Procrustean dictates but instead requires the band to adjust quickly/smoothly enough to tell a coherent story.
  • #2,197
  • Jul 17, 2019 3:44am Jul 17, 2019 3:44am
Quoting clemmo17
{quote} It seems to me that whenever fixed cycle terms/durations are used that some form of cleanup/stutter-step/adjustment is usually needed to make it consistent with actual price movements. This is why I think (so far) bands are the ultimate technical analysis tool since they account for both price and time despite any irregularities with the price wave. Once price has retreated from a band edge we assume the old cycle is complete and the new one begins. If price cuts through a band like a hot knife through butter we assume we're dealing with...
Envelopes Triad System is the simplest and the most effective system to determine Cycles Period and Amplitude.

By the way it is the first methodology used by Hurst in his first book Profit Magic (1970)

Fast Fourier Transform and other mathematical niceties are IMHO not very useful to determine Cycles Periods / Frequencies due to the aggregating algorithm necessary to assemble adjacent close frequencies.

Envelopes show Cycles in the real Life.

Mathematics have diverted attention from important questions about Cycles behaviour :

- after n occurrences Cycles dissapear
_ Cycles dissipate their "energy" and both Period and Amplitude shorten
- some Cycles "sleep" and are no more visible
- Cycles Inversion
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  • #2,198
  • Jul 17, 2019 4:21am Jul 17, 2019 4:21am
The Diamonds located in the Lower part of the Chart show how Sentient Trader "count" and position the Cycles issued from Hurst Nominal

With the Envelope Triad System I get manually and visually similar but different results

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  • #2,199
  • Jul 19, 2019 4:32am Jul 19, 2019 4:32am
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  • #2,200
  • Jul 19, 2019 4:47am Jul 19, 2019 4:47am
Quoting parisboy
{image}
Hi Alain
You have forgot the Grid/Map (haha)
Dave
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