Analysis and Trading based on Envelopes, Waves, Cycles

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Hello,

Where theory rejoins the practice

Stats Based on last 256 days () from MES (micro SP500 future) 1min timeframe of period CMA 256(-128) and CMA 128(-64) including the minors CMA and number of cross together from each CMA :

=> The average of high to high on focal 256(-128) and minor CMA 128(-64) is +-240bars
=> The average of high to low on focal 256(-128) and minor CMA 128(-64) is +-120bars
=> The average of high to cross on focal 256(-128) and minor CMA 128(-64) is +-80bars
=> The average of cross to low on focal 256(-128) and minor CMA 128(-64) is +-40bars

=> The average of cross to cross on focal 256(-128) and minor CMA 128(-64) is +-120bars

=> The average of low to low on focal 256(-128) and minor CMA 128(-64) is +-240bars
=> The average of low to high on focal 256(-128) and minor CMA 128(-64) is +-120bars
=> The average of low to cross on focal 256(-128) and minor CMA 128(-64) is +-80bars
=> The average of cross to high on focal 256(-128) and minor CMA 128(-64) is +-40bars

=> 256(-128) crosses 64(-32) => average of 4
=> 256(-128) crosses 32(-16) => average of 8
=> 256(-128) crosses 16(-8) => average of 16
=> etc...

during cyclal mode...
when CMA cross on the up, look for down, when cross on the down, look for up :-)
average historicaly high to low or low to high, make 120 bars... half of high to high or low to low, means 240 bars...

Connecting major focal (256 -128 and 128 -64) to minor focal (128 -64 and 64 -32), question of probability, average of 4 crossing of cycle 64 -32 during the cycle of 256 -128. Here on picture we had did 2 crossing already, the third probably like reversal on midline between focals and the fourth => down


edit 1 : it can be wrong direction too, sometimes



edit 2 : if analyze more... we add a new focal, getting major, intermediare and minor focal (64 -32 and 32 -16) where we can see new movement where the price is encapsulated between resistance (from first mid line of focal major/intermediare) and support (from second mid line of focal intermediare/minor), before breakout

US30 1min

EURAUD 1 mn

Food for thoughts
another way to understand the 50 % Retracement

About Moving Averages

The key is in the "theory" which allows us to understand how Moving Averages really work and what are their real qualities.

Let me be clear up to 2006 I was like everyone else, looked at my screen and saw the MA's going up or down.

Then I discovered Hurst through a booklet of TradingFive where they explain the CMA crossing of a Full Period CMA (ex: 32) with a Half -Period CMA (ex: 16) to calculate a target price.

After 5 / 10 minutes I told myself "I can do it" Then I bought Profit Magic, then the course. where all you have to know about CMA's and MA's is explained in detail.

You are a coder, a computer kid era. I began to draw chart in 1972 - pencil, paper , rubber, ruler. You missed that. Because charting manually this way, you HAVE to think BEFORE you draw your chart what you want exactly on your chart, which parameters to use etc otherwise you have to start a new chart manually if it does not fit your requirements. Hence your have to weigh your options.

It was exactly similar for Moving Averages. Do you imagine yourself calculating all these MA's manually ? every minute ?
To facilitate your work techniques were created and published in newsletter or sold in seminars in the seventies.

For example let's take a MA 5. Data are 3,4,5,6,7 = 25. Average = 25/5 = 5. For a CMA you position your average 5 under the number 5 of the data serie which in the middle of the serie , in the center, in third position of 5

Let's now add a new number 8 . As it is a new additional number you add 8 to the total of the previous sum of 5 data (25) and you substract the first number of the data serie (3)

Hence we have (25+8-3)/5 = 30 /5 = 6 If you chart that 6, being bigger than 5 your MA goes Up
Let's assume your new additional number is 3 , you have (3+25-3) = 25/5 = 5 . Your next average number is 5 . Your charted MA is flat
Let's assume your new additional number is 2. you have (2+25 -3) = 24 = 24/5 = 4.8. Your next average number is 4.8 . Your charted MA goes down

Your data serie is 3,4,5,6,7. Let's assume that 7 is your last price. In this example as long as your additional price is greater than the price you substract from the total (3) your MA goes up.

Your MA goes Up even if your new additional price is lower than your last price as long as this price is greater than 3.

It is easy to see that Centered Moving Average 128 is in the middle of successive Swings of EURAUD 1 mn Price Action
Then you know what and where to look

1 mn is IMHO necessary for TRAINING because 1 Minute = 1 Bar

CMA 16 has a Lag of 8 Minutes
CMA 32 a Lag of 16 minutes
CMA 64 a Lag of 32 minutes
CMA 128 a Lag of 64 minutes
CMA 256 a Lag of 128 minutes

Alain,
do you see what i see on picture ?

Can u explain numbers... i don't understand
Tnx

US30 1h