TECHNICAL ANALYSIS
formed from a cycle showing a top every five weeks in corn prices, a top every twelve weeks, etc.) was the predictor of top or bottom.
According to increased would their
calculations, this large amount of data
the
likelihood that the combined c ycles
g ive
accurate predictive postures for all the categories of traded ins trument s. The resul ts were quite positive for them.
This was laboriously done before computers.
Obviously, thing s are a bit easier and fas ter nowadays. However, be cause of
vas t computer
power, there is so much data ava ilable today, that another problem exist s
for
traders - wading through massive amounts of differing forms of analyses.
This info overload, when added to the current market moves amidst significantly increased
based on only one data point – price – in each category – stocks, bonds, commodities, or currencies. Cycle analysis takes into account repeating patterns from the past, and assumes these patterns will continue.
Second, there is a growing sense that,
with cycles,
the “craziness” and volatility of currency markets, not apparently explainable by fundamental research, is understandable based on past patterns repeating. This provides comfort to
those
Cycle analysis teaches us that the news is not what is running the markets, but cycles are
for explanations around
looking to
market movements. Clearly, media sources
the
world would like to explain it
otherwise.
However, it must be remembered the media is concerned primarily about one thing: selling advertising space.
Third, cycles also govern macroeconomic indicators as
FX TRADER MAGAZINE April - June 2014 45
volatility, has increased the difficulty of arriving at comfortable trading positions. Cycles can help. They are
The
FX unique tool of utilizing
cycles can also lead to other considerations.
First, cycle analysis
teaches us that the news is not what is running the markets, but cycles are – which affect the market moves occurring at major cycle tops.
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