HOW-TO: Cycle analysis helps to detect important turning points
Updated
The concept of cycle analysis has enourmous power to detect and project important points in time when markets might turn. Cycles work in the time domain and therefore offer additional value to technical analysis. As technical analysis is mainly driven by price, cycle analysis offers a view on another parameter: Time. The most important situations occur when time-based cycle projects come into alignment with price-based technical analysis.
Therefore, every trader and analyst should also pay attention to time-based cycle analysis. My objective is to offer tools and improved technical indicators on this platform to combine cycle analysis with technical analysis to help in detecting important turning point.
This idea is a summary and real-case example on how time-based cycles gave us the exact pre-information on the expected market top during the period October 2021 to 2022. All has been freely avaiable to the public without any need for subscribtion. Check the signature link.
Time-based analysis requires additional tools which are not available directly on TradingView yet. Therefore we must reference additional tools to detect relevant cycles. The public announcements based on time-based cycle analysis on the global markets are labled on the chart "Weekly Cycles Rolling Over" (Oct.2021) and "The Calm before the next Wave" (Jan.2022). Look for "The clam before the next wave" via the signature link. They are freely available for your review and have been posted in advance. We will continue to bring more and more of our cycle tools directly to the TV platform, as Pine will allow us to do so.
Once you know the dominant cycle (length), you can use this information to improve your technical analysis on the price chart. I do provide different free indicators here on the TradingView platform which are free to use in your own analysis. Please see the linked related ideas which provide access to these indicators for your own free usage.
The key is do use the known dominant cycle as input for these indicators. Once the "correct" input is given - these indicators will reduce noise and will make the turns visible on the price chart. The following example is using one of the indicators available here on the TradingView platform. The cyclic tuned RSI indicator:
Thats how you can use cycles to improve your trading skills.
Join the livestream to discuss the analysis and how it can be used on the TradingView chart:
tradingview.com/streams/WF9lEQmxzL
Therefore, every trader and analyst should also pay attention to time-based cycle analysis. My objective is to offer tools and improved technical indicators on this platform to combine cycle analysis with technical analysis to help in detecting important turning point.
This idea is a summary and real-case example on how time-based cycles gave us the exact pre-information on the expected market top during the period October 2021 to 2022. All has been freely avaiable to the public without any need for subscribtion. Check the signature link.
Time-based analysis requires additional tools which are not available directly on TradingView yet. Therefore we must reference additional tools to detect relevant cycles. The public announcements based on time-based cycle analysis on the global markets are labled on the chart "Weekly Cycles Rolling Over" (Oct.2021) and "The Calm before the next Wave" (Jan.2022). Look for "The clam before the next wave" via the signature link. They are freely available for your review and have been posted in advance. We will continue to bring more and more of our cycle tools directly to the TV platform, as Pine will allow us to do so.
Once you know the dominant cycle (length), you can use this information to improve your technical analysis on the price chart. I do provide different free indicators here on the TradingView platform which are free to use in your own analysis. Please see the linked related ideas which provide access to these indicators for your own free usage.
The key is do use the known dominant cycle as input for these indicators. Once the "correct" input is given - these indicators will reduce noise and will make the turns visible on the price chart. The following example is using one of the indicators available here on the TradingView platform. The cyclic tuned RSI indicator:
- 1) The first indicator signal occured already in May 2021 when to signal line crossed below the dynamic upper band of the cyclic smoothed RSI indicator. While the weekly cRSI is also overbought, indicated by the red background. However, this technical signal occured not in the projected timing window which was given by the dominant cycles. The cycles still have been in their upswing phase on the weekly and daily cycles. So at point (1) we had a technical sell signal. Which was not confirmed by time-based cycles. Time and price have not come into alignment.
- 2) The second indicator signal (sell) occured in November 2021. When the signal line touched the upper band and reversed, while the weekly cycles have been in overbought situation (red background). This time now is different because the time-based cycles have rolled over! The upswing cycle phase has ended. This was published based on the the time-based cycle analysis "Weekly S&P500 cycles rolling over" on October 2021. So now we have an alignment of the technical cyclic tuned indicator and confirmed by the weekly cycles which have rolled over now indicating a time-based top. Price and time based cycles have come into alignment. There is no misinterpretation possible. There are no other sell signals or buy signals following this method. A clear top/sell signal in November 2021, after the time-based cycle analysis was published in October 2021.
- 3) The third indicator signals (sell) occured around 12. Jan. 2022, once the divergence between price and the indicator top has become visible. This price cycle signal (divergence) was supported by the time-based cycle analysis published on 18th January, labled "the calm before the next wave". This time, again daily time-based cycles and price cycles from the shown indicator have come into alignment. Again a clear signal that after the weekly cycles (see #2) now the daily cycles have joined the bearish camp confirmed by the divergence signal at the same time on the price chart.
Thats how you can use cycles to improve your trading skills.
Join the livestream to discuss the analysis and how it can be used on the TradingView chart:
tradingview.com/streams/WF9lEQmxzL
Note
Here is is more detailed view about the 3 weekly dominant cycles discussed ahead of time in October. The indicator below the chart is public available here on the platform. A deep-dive with background information will be discussed in the video & live stream tomorrow.Note
Note
Note
Note
Join the live stream for more details and background. You will also learn how to use the public available indicator which is shown on each chart.**Sat, March 12. - 21:00 CET**
tradingview.com/streams/WF9lEQmxzL/
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