Analysis and Trading based on Envelopes, Waves, Cycles | Page 572 | Forex Factory

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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

  • #11,421
  • Oct 20, 2023 4:35am Oct 20, 2023 4:35am
Quoting aptx
{quote} With you. But would suggest re- reading Tillman's "Technically Speaking" interview on the same. There is a hint there :-)
I assume you're referring to the idea that price moves are comprised of 5 legs, and sometimes 3 legs. I'm not a huge fan of this concept, mainly because it becomes quite subjective when deciding whether a retrace should be considered as a leg or not, similar to the issues when using Elliot waves.
Additionally, at major cycle turning points, as I believe Bitcoin is doing now, these counts must breakdown to allow the trend to change.

Or were you referring to something else?
  • #11,422
  • Oct 20, 2023 5:00am Oct 20, 2023 5:00am
Quoting parisboy
As for myself I stick to Hurst Definition : A single repetition of a wave movement is called a cycle This definition is incomplete if we look at the charts Hurst used as illustrations Hurst showed us : - 2 successive Price Movement going from a Low Level to a Top then the same Low Level - this Price Movement has an Amplitude A (at the Top) (Dewey used the word Strength) - this Price Movement has a Period P (duration) Technically and practicall : a) you identify a Wave going from a Low level L to a top T then to the same level L b) you identify a...
haha....just picked up your bit of humour (on my second read)
  • #11,423
  • Oct 20, 2023 6:09am Oct 20, 2023 6:09am
Quoting tmpascoe
{quote} I assume you're referring to the idea that price moves are comprised of 5 legs, and sometimes 3 legs. I'm not a huge fan of this concept, mainly because it becomes quite subjective when deciding whether a retrace should be considered as a leg or not, similar to the issues when using Elliot waves. Additionally, at major cycle turning points, as I believe Bitcoin is doing now, these counts must breakdown to allow the trend to change. Or were you referring to something else?
Terry IMHO it is a sign that Tillman, who followed the Hurst Course was trying to find a link between "Hurst Theory" and some Wave Theory . At the Time the only Wave Theory was the Elliott wave Theory and Prechter had a very big reputation. Unfortunately we have no other writings of Tillman after this period

Anyway we have already some practical rule

If we have a 3 Wave Swing we have a main Focal Point at the middle of Wave 2
If we have a 5 Wave Swing we have a main Focal Point at the middle of Wave 3
If we have a 7 Wave Swing we have a main Focal Point at the middle of Wave 4
  • #11,424
  • Oct 20, 2023 8:44am Oct 20, 2023 8:44am
The 3 Envelopes system as I use allows to rationalize and hierarchize Waves and their Count .

Practically it reduces ambiguity without suppressing it totally.
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  • #11,425
  • Oct 20, 2023 8:54am Oct 20, 2023 8:54am
As you can see Price fluctuates within the Envelope 128 since 2020

Envelope 32 (blue) allows you to identify a 5 Legs Down Move whose all Tops and Lows are located on or very close above or under the Envelope 128 boundaries.

It is we can say that these Legs (Swings ) are of the same degree / nature / order
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  • #11,426
  • Oct 20, 2023 9:03am Oct 20, 2023 9:03am
As you can see Price fluctuates within the Envelope 32

Envelope 32 (blue) allows you to identify a 5 Legs Up Move whose all Tops and Lows are located on or very close above or under the Envelope 32 boundaries.

It is we can say that these Legs (Swings ) are of the same degree / nature / order

But the Amplitude of these Up Swings is HALF the Amplitude of the previous Down swings
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  • #11,427
  • Oct 20, 2023 9:14am Oct 20, 2023 9:14am
on the Left of the chart you can see an 11 Legs Upswing where Price Action is mainly fluctuating within Envelope 32
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  • #11,428
  • Oct 20, 2023 9:18am Oct 20, 2023 9:18am
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  • #11,429
  • Oct 20, 2023 8:22pm Oct 20, 2023 8:22pm
Thanks Alain. I've been looking at waves within hand drawn channels in the same manner to try to remove the ambiguities associated with identifying waves. Based on that I think Bitcoin has only completed 2 waves within the blue channel and should have to complete at least one more wave.

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  • #11,430
  • Edited 1:08am Oct 23, 2023 12:23am | Edited 1:08am
DAX m1:
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edit: update: there was slightly more an the table:
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Stick to the plan!
  • #11,431
  • Oct 23, 2023 2:31am Oct 23, 2023 2:31am
Riding the waves:
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  • #11,432
  • Edited 7:15pm Oct 23, 2023 5:17pm | Edited 7:15pm
There's approximately 70 days until the end of the year. The values coming off the pink CMA (left rectangle) will likely be less than the values being added (right rectangle), causing the pink CMA to rise.
Based on my calculations, even if Bitcoin falls to 27000 by year end, the pink CMA will still be pointing higher.

What does this mean for crypto? It means the 3yr, 18m and 9m cycles have all bottomed and are now trending higher.

Large cycles tend to have large amplitudes (Hurst's principle of Proportionality) leading to large price movements in the underlying asset. When the large cycles change direction their influence on price is often diminished. We've seen this in Bitcoin's price action over the past year with very small price movements. Once the large cycles are all pointing higher, we can expect to see much larger price movements again.
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  • #11,433
  • Oct 23, 2023 7:39pm Oct 23, 2023 7:39pm
Cycles drive the price, then (after the fact) market analysts look for an event to justify the move. They'll always find one. This time it's the possibility of a Bitcoin ETF.
  • #11,434
  • Oct 24, 2023 12:37am Oct 24, 2023 12:37am
DAX m1, ECB day and news all over:
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Stick to the plan!
  • #11,435
  • Edited 7:19am Oct 24, 2023 6:33am | Edited 7:19am
Quoting tmpascoe
Cycles drive the price, then (after the fact) market analysts look for an event to justify the move. They'll always find one. This time it's the possibility of a Bitcoin ETF.
Terry in itself it is a true and astute remark. and 100 % true.

But "Cycles" alone do not drive the price.

"Cycles" contribute to drive the price together with Trend

That is what Dewey and Hurst wrote . In their opinion they had the same estimation of the influence of Trend on Price (73%) for Hurst and (75%) for Dewey.

You have to note that Neither Hurst nor Dewey explained us how they reached such conclusion.
Their followers never contributed publicly on this capital subject.

After many years of reflexions and work on Hurst writings and other Analysts my conclusion is that IF we agree that the MAJOR factor influencing Price Action is the Underlying Trend we have to focus our attention FIRST on TRENd, and then on "Cycles"
  • #11,436
  • Oct 24, 2023 6:46am Oct 24, 2023 6:46am
Quoting tmpascoe
There's approximately 70 days until the end of the year. The values coming off the pink CMA (left rectangle) will likely be less than the values being added (right rectangle), causing the pink CMA to rise. Based on my calculations, even if Bitcoin falls to 27000 by year end, the pink CMA will still be pointing higher. What does this mean for crypto? It means the 3yr, 18m and 9m cycles have all bottomed and are now trending higher. Large cycles tend to have large amplitudes (Hurst's principle of Proportionality) leading to large price movements in...
Fact is no cycle analyst I know has really worked on the Amplitude of the "Cycles" and consequently not at all on the relationship(s) between the Amplitudes of the Cycles whatever "Cycles " or whatever Cyclic Model you use.

Large cycles tend to have large amplitudes (Hurst's principle of Proportionality) leading to large price movements in the underlying asset.

The Principle of Proportionality is obviously true . But it is just a common sense generality.

The question is which Proportionality ?
How Proportionality works ?
Is it a Proportionality Factor stable along a series of successive Cycles ?
Does the same Propotionality factor works for "Cycles" linked by a 2 relationship and a 3 relationship. ?

and other questions can be raised about Proportionality. and Cycles
  • #11,437
  • Oct 24, 2023 6:56am Oct 24, 2023 6:56am
NQ1:
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Stick to the plan!
  • #11,438
  • Edited Oct 25, 2023 3:46am Oct 24, 2023 7:05am | Edited Oct 25, 2023 3:46am
If you look at the 2012 - 2017 chart of the Bitcoin it is obvious that the 9 Month, 18 month and 3 year "Cycles" (if they exist at the time in the data series (which I believe) have not at all the same Amplitude as right now in 2023.

Can we consider that they are the same Cycles at the beginning of the Data series and at the end ?

If we define "Cycles " ONLY by taking into account the TIME Parameter (the Period) Yes; It is the way all cycle analysts are focused.

But in this case how to explain theoretically and practically these huge changes in Amplitude ? How to integrate this fact in a Cyclic Theory ?
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  • #11,439
  • Oct 24, 2023 7:11am Oct 24, 2023 7:11am
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  • #11,440
  • Oct 24, 2023 10:11am Oct 24, 2023 10:11am
HANG SENG INDEX Daily

In blue a 3072 Days (12 Years) Envelope
Observe the CMA "аий (Centerline of the 3072 Envelope) which summarize the 12 Years Long Term Trend
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