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Analysis and Trading based on Envelopes, Waves, Cycles

  • #10,081
  • Edited 4:07am Apr 6, 2023 3:39am | Edited 4:07am
E-mini Daily

Trending Mode and Cyclic Mode

According to John Ehlers :

TREND VIGOR

•• Trend Vigor is the ratio of the (smoothed) trend slope across one full cycle period to the cycle peak to--peak amplitude..
•• If the ratio is greater than one the trend component swamps the cycle

––Don’’t stand in front of the train

–– You can still use the cycle to enter the trade at the best time in the direction of the trend
•• If the ratio is less than one the trend has a minimum effect on the cycle
–– Use your favorite oscillator (mine is the Bandpass filter)
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  • #10,082
  • Apr 6, 2023 3:50am Apr 6, 2023 3:50am
BTCUSD 1 mn
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  • #10,083
  • Apr 6, 2023 4:12am Apr 6, 2023 4:12am
Quoting aptx
Looks like PVR bottomed: {image}
PVR follow through:
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  • #10,084
  • Apr 6, 2023 4:42am Apr 6, 2023 4:42am
PVR 1 mn
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  • #10,085
  • Apr 6, 2023 4:50am Apr 6, 2023 4:50am
PVR

Building a Double Bottom
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  • #10,086
  • Apr 6, 2023 4:57am Apr 6, 2023 4:57am
––Don’’t stand in front of the train
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  • #10,087
  • Apr 6, 2023 5:01am Apr 6, 2023 5:01am
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  • #10,088
  • Apr 6, 2023 5:03am Apr 6, 2023 5:03am
BTCUSD 1 mn

Mid-Band Trading Short
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  • #10,089
  • Apr 6, 2023 5:15am Apr 6, 2023 5:15am
Quoting parisboy
{quote} Hello Ace, everything goes well Thanks for asking I have invested a lot of time and efforts on the Sqaure of Nine a Long Time and never goes practically anywhere on atrading or investing point of view. In 25 years I have never met a trader trading PERSISTENTLY - every dayn week etc on various time frames and financial entity. For example , It does not exist on FF for example. (Search Square of Nine) Hence I focused as you know on Hurst Trading Methodology and Gann / Murrey Grid System Anyway Ace feel free to post your Square of Nine Examples...
Parisboy,
Glad all is well for you & thank you for your response. After several years of looking into Gann & Square of Nine I've determined the same a you have. Will continue to devote my time & energy to how I am trading & using cycles.
  • #10,090
  • Apr 6, 2023 7:59am Apr 6, 2023 7:59am
a potential scenario

Hi Alain, just reading your posts on the forum.

It's clear that the longer term cycle has reached its target and is now turning up, but if we apply larger CMAs it becomes possible that this could potentially be a mid cycle pause before the next leg lower.

The idea is also supported by FLD targets and you can see that the tan FLD has already been broken.

This is why I remain unsure the chart has bottomed.

IMHO it would be a MCP with limied amplitude - then effect
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  • #10,091
  • Apr 6, 2023 8:00am Apr 6, 2023 8:00am
Weekly Chart
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  • #10,092
  • Apr 6, 2023 11:18pm Apr 6, 2023 11:18pm
Quoting parisboy
Weekly Chart {image}
Why this point ?
  • #10,093
  • Apr 7, 2023 3:18am Apr 7, 2023 3:18am
Quoting aptx
{quote} Why this point ?
courtesy of Terry Pascoe who has made an amazing job developing this tool.

If we suspect / forecast that CMA 128 (ocre) and 256 (black) will go through the black dot building a FP4 then a FP5

it means that CMA is 30 Time Units (weeks) away Up from the black dot target and CMA 256 - 108 Time Units away (2 Years) from this target
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  • #10,094
  • Apr 7, 2023 5:17am Apr 7, 2023 5:17am
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  • #10,095
  • Edited 1:15pm Apr 7, 2023 12:54pm | Edited 1:15pm
Courtesy of David F. from Sigma L

https://www.sigma-l.net/p/underlying...m_medium=email

Underlying Trend: Sigma-L

In this article we look at how to account for the ever present underlying trend in the context of the advanced fld trading strategy explored previously.

Hurst Cycles Toolset (Advanced)
Nov 4, 2021 Markets Are Never Flat


A simple concept, but one which must be considered for our purposes as Hurstonians, is underlying trend. Named by Hurst as ‘sigma-l’ to simply mean ‘the sum of all cycles’, it is inherent in a system which assumes cycles form an infinite series of increasing period. This underlying trend (which can be thought of as a sum of sinusoidal functions) is never static. It may appear to be flat when shorter cycles form sideways consolidations but this is just a result of a much larger period cycle, relative to the cycle in focus, turning up or down.

Traditional technical analysis has come to love the simple moving average as an indicator of trend, usually set at a arbitrary period of 50, 100 or 200 to smooth higher frequencies.

This is a blunt tool and flawed.

Firstly by the fact moving averages must be time shifted by the (period/2) to account for the digital filter lag and,
secondly, the moving average makes no attempt to decompose the signal, save for it’s low pass characteristics.

In the Cyclitec cycles course Hurst tabulated sigma-l by assessing the phase of each component in question and arriving at an estimation for sigma-l.

Below is an example of this in Sentient Trader using the daily phasing of Bitcoin.

Each nominal model component is assessed and given a status of up, down, turning down, turning up.

Note the absense of the 9 year and 18 year components because they are not present in the phasing analysis.
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  • #10,096
  • Edited 1:17pm Apr 7, 2023 12:57pm | Edited 1:17pm
Courtesy of David F. from Sigma L

In Practice

We will take our advanced FLD trading strategy which uses 3 discrete components of the nominal model and their respective signal cycle FLDs to demonstrate a rudimentary application of sigma-l.

In this example we will assign a linear trend to the model and observe the effect on price, interactions and the summary status of ‘M-Sigma’ - our subset of underlying trend only applicable to this 40 week sample.

In real markets the trend is not linear and is the sum of what can be thought of as discrete, sinusoidal functions of increasing wavelength.

The model here assumes a non-existent sigma-l. Put simply, the value of sigma-l is zero.

In real markets this is never true, but may be approached if a much longer cycle is either turning up, or turning down.
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  • #10,097
  • Edited 1:18pm Apr 7, 2023 12:59pm | Edited 1:18pm
Courtesy of David F. from Sigma L

Trend is Up

Here we assign sigma-l a value of 1 and the dotted line below price is an indicator of it’s function.

The effect on the composite price line is obvious with the familiar ‘higher low’ forming at the end of the chart and price skewed upwards.

A bullish (positive) underlying trend modulates the composite summation such that upside targets of already bullish FLD interactions are heavily exceeded.

Interactions which were previously expected to just meet downside targets will now be undershot.
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  • #10,098
  • Edited 1:19pm Apr 7, 2023 1:01pm | Edited 1:19pm
Courtesy of David F. from Sigma L

Trend is Down

Here we assign sigma-l a value of -1 and the inverse effect of a positive sigma-l is observed.

The effect on the composite price line a ‘lower low’ forming at the end of the chart and price skewed downwards.

A bearish (negative) underlying trend modulates the composite summation such that downside targets of already bearish FLD interactions are heavily exceeded.

Interactions which were previously expected to just meet upside targets will now be undershot.
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  • #10,099
  • Edited 1:21pm Apr 7, 2023 1:04pm | Edited 1:21pm
Courtesy of David F. from Sigma L

We can now look at what effect the addition of this simple linear trend has on our overall summary at each 20 day FLD interaction and the strength of the trade associated with it.

The addition of an underlying trend has an effect on the summary status of each interaction in the series of interactions, informing decisions.

The tabulation above shows the summary of each 20 day FLD interaction in the idealised 40 week period, via the model described previously. M-Sigma shows interaction trade direction and strength when the underlying trend is assumed to be 0, essentially a localised subset of underlying trend.

Subsequent summary columns show the resulting differences when underlying trend is up and down, respectively, as a true reflection of Sigma-L. This more closely resembles real price action in financial markets.

Looking at the summary columns with underlying trend accounted for we can see that in the bullish scenario, those trends previously described as ‘risk buy’ are now standard ‘buys’, some ‘buys’ become ‘strong buys’ and so on.

The underlying trend has the effect of amplifying bullish signals and attenuating bearish signals.

Of course the inverse is true when the underlying trend is bearish.
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  • #10,100
  • Apr 7, 2023 4:08pm Apr 7, 2023 4:08pm
@parisboy Plz share your analysis for gold... daily H4
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