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Analysis and Trading based on Envelopes, Waves, Cycles

  • #10,341
  • Edited 4:45pm May 5, 2023 8:15am | Edited 4:45pm
Quoting parisboy
I will elaborate later on various concepts we use : Cycle Wave Period Periodicity Rythm Regularity etc


As I have already written Edward Dewey wrote that we should use the label " Rhythm Analysis" much more than "cYcle Analysis".

The funny thing is that Dewey wrote that in his book whose the title is " How to make a Cycle Analysis"

What is a Rhythm ?

Rhythm means to repeat with a beat, It comes from a Greek word meaning
measured time. )

(Of course, you are hopeful that the rhythm will be so regular and
will have repeated so many times that the regularity cannot reasonably
be the result of chance. In this event you can expect it to continue. )

Cycles are oscillations -- ups and downs. The word comes from a Greek word
meaning circle- a coming around again to the place of beginning, e.g, a low.
You will want to study these up and down motions in the hope that they will be
rhythmic. )

For Jim Hurst a Cycle is the repetition of a Wave - same Period (Length) , same Amplitude

Trend. ls the tendency of a series of figures to increase or decrease
gradually over a period of time.
  • #10,342
  • May 5, 2023 11:52am May 5, 2023 11:52am
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  • #10,343
  • May 5, 2023 12:46pm May 5, 2023 12:46pm
Quoting tmpascoe
{quote} In addition to Alain's description above, the direction of the centred moving average is the sum of all cycles equal to or greater than the moving average. In other words, if the 128 period moving average is trending higher then sigma-L (the underlying trend) of all cycles >= 128 is up, so you don't need to determine if the majority are rising.
Got you but what it means is that if MA 128 is up then one assumes that even 256 is up ? But at times in the chart 128 looks up while 256 is still looking down. Or 16 could look up so it’s not possible that all waves bigger than that which is 32/64 etc are also moving up because visually they could be moving down ?
  • #10,344
  • Edited 4:36pm May 5, 2023 1:07pm | Edited 4:36pm
Parisboy's Cyclic Axiom number 1 : There is NO regular Cycle(s) operating in the Market(s)

There is only irregular "cycle(s) " operating in the Market(s).

Consequence :Can we label an irregular "cycle " as a "cycle" ?
  • #10,345
  • May 5, 2023 7:47pm May 5, 2023 7:47pm
Quoting aptx
{quote} Got you but what it means is that if MA 128 is up then one assumes that even 256 is up ? But at times in the chart 128 looks up while 256 is still looking down. Or 16 could look up so it’s not possible that all waves bigger than that which is 32/64 etc are also moving up because visually they could be moving down ?
If 128 is moving higher then the sum of all cycles greater than 128 is positive. This doesn't mean every cycle will be moving higher
  • #10,346
  • Edited 12:10pm May 6, 2023 5:07am | Edited 12:10pm
Quoting aptx
{quote} Got you but what it means is that if MA 128 is up then one assumes that even 256 is up ? But at times in the chart 128 looks up while 256 is still looking down. Or 16 could look up so it’s not possible that all waves bigger than that which is 32/64 etc are also moving up because visually they could be moving down ?
aptx this is an old theoretical chart showing the "nominal model" used by Edward Dewey in 1944 .

the cycle analysis process is simple as a concept :

- you isolate the various components
- these components allows you to combine components into a composite
some intermediary composite are more or less dominant
the components summed recreates your time series - for us the market.
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  • #10,347
  • May 6, 2023 5:17am May 6, 2023 5:17am
Bearish summation effect
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  • #10,348
  • May 6, 2023 5:20am May 6, 2023 5:20am
Bullish summation effect
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  • #10,349
  • May 7, 2023 4:30am May 7, 2023 4:30am
Don't project the trend any farther than you have to.

Revise your projection at frequent intervals.
  • #10,350
  • May 7, 2023 5:58am May 7, 2023 5:58am
https://www.forexfactory.com/thread/...1#post14414131

I was reading (again) a recent post on Natural Gas .

quote " In the last note (14 March 2023) the phasing analysis pointed to the end February price low as that of the 18 month cycle trough.
However, the force of the preceding downtrend looks to have pushed the trough forward in time (trough right translation)and the estimate for the next 18 month cycle trough is now the end of August.

This would be 19.5 months since the last 18 month cycle trough in January 2021, but we expect wavelength to stretch in a heavy downtrend).
Since the last 18 month cycle trough we had a major peak (last August) and the down cross of the 18 month cycle VTL makes it a 54 month cycle peak.
This is the longest cycle we look at and has a lot of power. It's why the downtrend has been so strong.

The poster labeled the trough of January 2021 as the trough of the last 18 month cycle
then mid march 23 he wrotes that the trough end of February 2023 was the trough of the 18 month cycle -

To my knowledge End of february 2023 is 24/25 months after January 2021 which is already a + 1/3 variation.

Now the poster estimates that the trough of the present 18 month cycle - beginning in January 2021 according to its phasing -- will be stretched until end of august 2023.- which gives us an "18 months " cycle 31 months long - +72 % variation

Let's say it is a very long "18 months" cycle (or a short 3 year Cycle ?)
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  • #10,351
  • May 7, 2023 6:09am May 7, 2023 6:09am
about Cycle(s) projection by Eward Dewey :

If your cycles have been determined correctly,
if they are significant,
if they continue,
and if your trend has been determined and projected correctly,

the projection of cycles and trend should forecast the future with no more error than is shown by the divergence of actual figures from the synthesis of cycles and trend.

(if, if, if, and if!!!)
  • #10,352
  • May 7, 2023 2:45pm May 7, 2023 2:45pm
BTCUSD Daily
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  • #10,353
  • May 7, 2023 9:02pm May 7, 2023 9:02pm
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A method I'm experimenting with to determine if price is likely to cross the mid line of a channel and move to the opposite boundary or bounce off the mid line.
step 1... Draw a channel through the major swings using focal points, the centre of the move, and your eye ("what looks right" - Tillman)
step 2... Count the bars between each cross of the midline where price moved to the opposite boundary. This is the half cycle.
step 3... Double this - this is the dominant cycle (can adjust CMA length to this but not critical)
step 4... Do the same for the minor cycle swinging up and down within the major cycle
Price will not normally break through the major channel mid line and cross to the opposite boundary until
a) the half cycle count has completed since the last cross of the major channel's midline
b) the minor channel's midline (inline with price) has crossed through the major channel's midline
Based on this Bitcoin is about to break lower as all of the criteria has been met
  • #10,354
  • Edited 9:52pm May 7, 2023 9:31pm | Edited 9:52pm
As "expected" Bitcoin broke lower but has not yet travelled all the way to the lower boundary of the major channel. As expected it was halted at the lower boundary of an even larger cycle (green line) and the lower boundary of the minor channel.
It may still move to the lower boundary of the major channel identified in the post above (once the criteria from above has been met) but this will mean the green channel has probably been broken.
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  • #10,355
  • May 8, 2023 3:56am May 8, 2023 3:56am
Quoting tmpascoe
{image} A method I'm experimenting with to determine if price is likely to cross the mid line of a channel and move to the opposite boundary or bounce off the mid line. step 1... Draw a channel through the major swings using focal points, the centre of the move, and your eye ("what looks right" - Tillman) step 2... Count the bars between each cross of the midline where price moved to the opposite boundary. This is the half cycle. step 3... Double this - this is the dominant cycle (can adjust CMA length to this but not critical) step 4... Do the...
Terry my 2 cents on your post
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  • #10,356
  • May 8, 2023 4:03am May 8, 2023 4:03am
we have very often this configuration (and conversely)

here in short a Straight Wave followed by a 7 Waves Retracement within the Main Channel Boundaries
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  • #10,357
  • May 8, 2023 4:42am May 8, 2023 4:42am
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  • #10,358
  • May 8, 2023 5:55am May 8, 2023 5:55am
Courtesy of Fomoslav

Soniic Waves
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  • #10,359
  • May 8, 2023 12:05pm May 8, 2023 12:05pm
BTCUSD 1 mn
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  • #10,360
  • May 8, 2023 12:38pm May 8, 2023 12:38pm
BTCUSD 1 mn

Short Follow Up

Envelopes
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