wackypete2
Legendary member
- Messages
- 10,211
- Likes
- 2,058
I'm sure he'll fix it when he gets back on. I think he's an hour or 2 behind me to the west in time zones so he's probably sleeping.
Peter
Peter
Lightning McQueen
Moderator
- Messages
- 4,992
- Likes
- 827
relax guys, stop trying to view the pics, the album is tagged as hidden. only contacts and mods will see the pics, explains why barjon can see the pics and we can't :smart: 
wackypete2
Legendary member
- Messages
- 10,211
- Likes
- 2,058
relax guys, stop trying to view the pics, the album is tagged as hidden. only contacts and mods will see the pics, explains why barjon can see the pics and we can't :smart:
That also explains why he didn't realize they weren't showing up. He could also see them!
lol. Kinda funny
Peter
counter_violent
Legendary member
- Messages
- 12,669
- Likes
- 3,787
And very nice charts they are too ! :clap::clap:
relax guys, stop trying to view the pics, the album is tagged as hidden. only contacts and mods will see the pics, explains why barjon can see the pics and we can't :smart:
I guessed, when we had that other problem, Don, that Jon was a mod and saw ALL!
Last edited:
mvtrader2000
Active member
- Messages
- 113
- Likes
- 15
Thank you HW, very interesting so far.
I too am always eager to learn. I can't wait for the next installment
I too am always eager to learn. I can't wait for the next installment
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
This post will talk a little about "static" cycle counts.
By static I mean you use a number that does not change for your count out into the future.
I don't know if you have ever tried to use a count like that on the charts, but some times it seams to work out wonderfully. For a while.
You notice that a nice pronounced top to bottom, or top to top (or bottom to bottom) has a count of let's say 24 bars. You count that out into the future and then get another turn at that point. Getting excited thinking you have found something that most every one else has missed you watch for the 24 count again.
This time all you get is a little hiccup instead of a nice turn.
Again you count out 24 bars and you get a smaller turn, but "still a turn" you think to yourself. Count 24 bars again and NOTHING happens!
You give up and walk away from the idea of static cycle counts and move on.
Months later you happen to notice that a 24 bar cycle shows back up!
You wonder why but know it will just leave again, so you don't give it another thought.
Here is what's happening:
When you measure a cycle like the 24 bar example from a top to bottom, or top to top, or bottom to bottom, You are most likely measuring more than one cycle.
It is also possible that you are measuring a single cycle but this too will only give you a bit of a head ache when trying to use it forever.
If you are lucky enough to be measuring a single cycle then you will always get some kind of reaction from your count. (with rare exception)
When you noticed the cycle count of 24 the first time the odds were VERY GOOD that that single cycle was in sync with at least another one, causing the market to move in a more pronounced manner. When the single cycle falls out of sync with the other cycle(s) the turn that happens in the composite (the market price) will be much smaller.
To make matters worse every once in a while other cycles will be in exactly the right phase, related to our single cycle, to cancel it out almost, if not completely.
Remember that was the good scenario.
If you were really measuring the composite of more than one cycle you will wind up with a lot more dead turns. You will have counts that just don't turn the market at all. The thing is when those two or more cycles do line back up together like they did when you spotted them before, they will produce like results. This will happen more often if the composite you measured was from two cycles and not more. If it was from four, five, or six then the odds are not good that you will see it with the same strength again for A LONG TIME.
One last thing to think about is the fact that if you did measure a composite from four, five, or six cycles then the static count may work for a few reps before it fades away depending on which cycles were lining up to begin with.
And still, More to come...
By static I mean you use a number that does not change for your count out into the future.
I don't know if you have ever tried to use a count like that on the charts, but some times it seams to work out wonderfully. For a while.
You notice that a nice pronounced top to bottom, or top to top (or bottom to bottom) has a count of let's say 24 bars. You count that out into the future and then get another turn at that point. Getting excited thinking you have found something that most every one else has missed you watch for the 24 count again.
This time all you get is a little hiccup instead of a nice turn.
Again you count out 24 bars and you get a smaller turn, but "still a turn" you think to yourself. Count 24 bars again and NOTHING happens!
You give up and walk away from the idea of static cycle counts and move on.
Months later you happen to notice that a 24 bar cycle shows back up!
You wonder why but know it will just leave again, so you don't give it another thought.
Here is what's happening:
When you measure a cycle like the 24 bar example from a top to bottom, or top to top, or bottom to bottom, You are most likely measuring more than one cycle.
It is also possible that you are measuring a single cycle but this too will only give you a bit of a head ache when trying to use it forever.
If you are lucky enough to be measuring a single cycle then you will always get some kind of reaction from your count. (with rare exception)
When you noticed the cycle count of 24 the first time the odds were VERY GOOD that that single cycle was in sync with at least another one, causing the market to move in a more pronounced manner. When the single cycle falls out of sync with the other cycle(s) the turn that happens in the composite (the market price) will be much smaller.
To make matters worse every once in a while other cycles will be in exactly the right phase, related to our single cycle, to cancel it out almost, if not completely.
Remember that was the good scenario.
If you were really measuring the composite of more than one cycle you will wind up with a lot more dead turns. You will have counts that just don't turn the market at all. The thing is when those two or more cycles do line back up together like they did when you spotted them before, they will produce like results. This will happen more often if the composite you measured was from two cycles and not more. If it was from four, five, or six then the odds are not good that you will see it with the same strength again for A LONG TIME.
One last thing to think about is the fact that if you did measure a composite from four, five, or six cycles then the static count may work for a few reps before it fades away depending on which cycles were lining up to begin with.
And still, More to come...
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
This slightly quicker post will be about a very familiar price formation on the Forex charts.
Take a look at the picture below and see what I'm talking about...
It is a contracting triangle.
This price formation can go by different names but the reason it exists is the same.
First let's take a look at the composite cycle from the earlier cycle posts, but this time the composite is expanded to three or four times the original length...
Do you notice what is happening with the composite?
It is forming a contracting triangle.
I will give you a hint as to what is going on. This next picture is of the same composite as before, but with the two smaller cycles removed. All that's left are the two larger cycles.
Notice how at the far left of the composite the shape of series 1 is nice and uniform?
As the composite goes on notice how the shape starts to become more and more distorted.
Then around the 776 number the smallest amplitude wave is again just about perfect in shape. As the composite goes on it starts to distort again as the amplitude increases.
What is happening here is the two cycles that were used to create the composite are falling out of sync with each other. As they do that the amplitude of one cycle starts to cancel out the amplitude of the other cycle.
The distortion of the composite happens when the two cycle are working against each other and changing the angle that the composite wave moves in that direction. Once the cycles start working with each other again the composite starts moving faster thus creating a steeper angle.
When the two cycles are completely out of sync they are countering each other for the whole move the composite makes. The angle of the composite stays constant but is not as steep as before.
Then every thing happens again but in reverse this time. As long as the cycles continue the will keep working with and against each other this way.
Here is a picture of the composite with the two cycles used to create it you can use to see what I was talking about a little better. The thick black line is the composite of the other two lines.
So when you see a contracting triangle on a chart you know what is going on. Two cycles that are close in size to each other (most of the time) are starting to work against each other. For whatever reason the other cycles involved in the market at that time are doing little to change the amplitude of the price composite. As a result the triangle formation can be seen much more clearly.
The result of this will be one of three things (again, most of the time)
1 The price makes a hour glass on its side pattern. A contracting triangle followed by an expanding one. They both point at each other. This happens because the two cycles are falling out of sync and then back into sync before the influence of other cycles starts to change price in other ways.
2 The price makes a contracting triangle and then "breaks out" in a stronger move.
You know what I'm talking about, lots of people describe it like a spring being tightened and then snap! Price takes off like a rocket. This happens because the two cycles creating the triangle did so as one or more larger cycles were cresting or ebbing thus giving much less influence to price amplitude than before. As the two cycles sync again the larger cycle(s) start moving in which ever direction the smaller ones are syncing and moving in and all (or most) cycles influence the amplitude of price greatly and rather suddenly. (in the same direction of course) Lots of times this happen when there are more than one bigger cycles cresting or ebbing at the same time. That's why the price move is so strong when it takes off.
3 The triangle forms as two or more larger cycles are working against each other. As the two larger cycles cancel each other out their influence to the prices amplitude in little to none. Some time after the triangle completes the price makes a move but it is not a strong one. You might see price make the contracting triangle and then part of the expanding one and then make a short but powerful and sudden move. The kind where when price does move it's only to the area of price that is at the top or bottom of the triangle. After this you will see the price consolidate again before it moves more. Some of the time it will make its breakout but then reverse direction and go the other way because of the way the larger cycles are working with/against each other at the time.
So that was todays post. It was a little longer than I intended and a wee bit rambling, I do believe, but I hope that I got the main idea across well enough.
Take a look at the picture below and see what I'm talking about...
It is a contracting triangle.
This price formation can go by different names but the reason it exists is the same.
First let's take a look at the composite cycle from the earlier cycle posts, but this time the composite is expanded to three or four times the original length...
Do you notice what is happening with the composite?
It is forming a contracting triangle.
I will give you a hint as to what is going on. This next picture is of the same composite as before, but with the two smaller cycles removed. All that's left are the two larger cycles.
Notice how at the far left of the composite the shape of series 1 is nice and uniform?
As the composite goes on notice how the shape starts to become more and more distorted.
Then around the 776 number the smallest amplitude wave is again just about perfect in shape. As the composite goes on it starts to distort again as the amplitude increases.
What is happening here is the two cycles that were used to create the composite are falling out of sync with each other. As they do that the amplitude of one cycle starts to cancel out the amplitude of the other cycle.
The distortion of the composite happens when the two cycle are working against each other and changing the angle that the composite wave moves in that direction. Once the cycles start working with each other again the composite starts moving faster thus creating a steeper angle.
When the two cycles are completely out of sync they are countering each other for the whole move the composite makes. The angle of the composite stays constant but is not as steep as before.
Then every thing happens again but in reverse this time. As long as the cycles continue the will keep working with and against each other this way.
Here is a picture of the composite with the two cycles used to create it you can use to see what I was talking about a little better. The thick black line is the composite of the other two lines.
So when you see a contracting triangle on a chart you know what is going on. Two cycles that are close in size to each other (most of the time) are starting to work against each other. For whatever reason the other cycles involved in the market at that time are doing little to change the amplitude of the price composite. As a result the triangle formation can be seen much more clearly.
The result of this will be one of three things (again, most of the time)
1 The price makes a hour glass on its side pattern. A contracting triangle followed by an expanding one. They both point at each other. This happens because the two cycles are falling out of sync and then back into sync before the influence of other cycles starts to change price in other ways.
2 The price makes a contracting triangle and then "breaks out" in a stronger move.
You know what I'm talking about, lots of people describe it like a spring being tightened and then snap! Price takes off like a rocket. This happens because the two cycles creating the triangle did so as one or more larger cycles were cresting or ebbing thus giving much less influence to price amplitude than before. As the two cycles sync again the larger cycle(s) start moving in which ever direction the smaller ones are syncing and moving in and all (or most) cycles influence the amplitude of price greatly and rather suddenly. (in the same direction of course) Lots of times this happen when there are more than one bigger cycles cresting or ebbing at the same time. That's why the price move is so strong when it takes off.
3 The triangle forms as two or more larger cycles are working against each other. As the two larger cycles cancel each other out their influence to the prices amplitude in little to none. Some time after the triangle completes the price makes a move but it is not a strong one. You might see price make the contracting triangle and then part of the expanding one and then make a short but powerful and sudden move. The kind where when price does move it's only to the area of price that is at the top or bottom of the triangle. After this you will see the price consolidate again before it moves more. Some of the time it will make its breakout but then reverse direction and go the other way because of the way the larger cycles are working with/against each other at the time.
So that was todays post. It was a little longer than I intended and a wee bit rambling, I do believe, but I hope that I got the main idea across well enough.
Last edited:
mvtrader2000
Active member
- Messages
- 113
- Likes
- 15
Yes, very clear thanks. It explains perfectly why the anticipated powerful move to breakout of a triangle is only a big move sometimes but not others.
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
Thank's for your reply and for your interest. Always makes it easier when you know some folks are really reading what you have wrote even with the bad grammar.
You may want to take a look again cause I did go over the last post and re-word a few things. Hopefully it made the ideas I was trying to get across a little clearer.
Steele. Thanks for the in depth posts must be taking you a lot of time to write.
I have a question. What causes the cycles? As it we know that in order for price to move people need to place trades. So how does this relate? Surely no matter what cycle is going on, if there is a big news event it will override it?
I have a question. What causes the cycles? As it we know that in order for price to move people need to place trades. So how does this relate? Surely no matter what cycle is going on, if there is a big news event it will override it?
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
dude ....a market is always trending........you just have to drop up or down to the trending timeframe
respect......some nice insights
N
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
dude ....a market is always trending........you just have to drop up or down to the trending timeframe
respect......some nice insights
N
Yes you are correct about that and have brought up a point I was going to make after a couple more post about cycles. Since you have made the point here I will go ahead and make that point now.
On a "static" time frame the market can do but three things as mentioned in another post. (and now this one too
)When you categorize the markets three possibilities you will see that the price movement falls into only two categories. Trending and sideways.
As I have talked about before the two categories are traded in the exact opposite manner when traded successfully.
The reason for this is because of what the cycles, working in the market, are doing in relation to each other at that particular point in time.
When the market is trending the cycles are more in sync with each other.
When the market is moving sideways the cycles are much more out of sync and working against each other. Most of the time the bigger cycle working in the time frame of what ever chart you are using (hour, day, 15minute, and so on) is cresting or ebbing, or there are two or more working against each other. As in they are out of sync. When this happens the majority of the price amplitude comes from the smaller cycles. Because of this the market moves back and forth very quickly compared to what it did before.
Now if you zoom in or out in time you will be looking at different cycles. Or at least the big cycles will now be the medium or small ones. Or the small cycles will now be the bigger ones.
So if you come at the markets from a quantum mechanics way of thinking all the markets can do is trend, and you are looking for the probabilities of how long the trend will last.
If you are coming from and Einstein E=mc2 approach then the market can do two things. Trend and move sideways. But this is only true in an relative time frame. Change the time frame and the cycles are going to change. This means the only constant then is times passage. It stays the same no matter what time frame you are looking at. In our case time passing is the replacement of the speed of light.
If you come from a Newtonian physics stand point then there are three possibilities and they are all separate.
Up trend
Down trend
Sideways or consolidation
The thing is with trading you can come from any one of the three and still be able to forecast and more importantly trade the markets.
I guess that would make the holy grail the unified theory.
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
This is very interesting stuff.
Wait 'til we get to the "secrets". That's when people are going to start to have something to think about. HA!Ha!haaa!
Sorry too much cold medicine.
mvtrader2000
Active member
- Messages
- 113
- Likes
- 15
If you are coming from and Einstein E=mc2 approach then the market can do two things. Trend and move sideways. But this is only true in an relative time frame. Change the time frame and the cycles are going to change. This means the only constant then is times passage. It stays the same no matter what time frame you are looking at. In our case time passing is the replacement of the speed of light.
If you come from a Newtonian physics stand point then there are three possibilities and they are all separate.
Up trend
Down trend
Sideways or consolidation
The thing is with trading you can come from any one of the three and still be able to forecast and more importantly trade the markets.
I guess that would make the holy grail the unified theory.
Hang on....I just need to pop all of this into the Hadron Collider and press.....er...now was it the up button or the down button.......no wait...... it may have been the sideways button...........Strange!!!! No sideways button??????????
Great stuff, and as I said before, much appreciated.
hwsteele
Experienced member
- Messages
- 1,227
- Likes
- 182
Yes it does take quite a lot of time but it is something I enjoy doing, at least for the time being.
I get to spend a lot of time in front of my computer at times and this helps fill the idle time in front of it. I hope it helps some folks and you guys can take at least something away from it. Even if it is just renewed interst in learning and understanding. The only problem is I SUCK ROTTON EGGS when it comes to grammar and spelling so please forgive the ever present mistakes in both.
This is a big question to answer because it can test peoples belief system. SO I am not going to be giving my two cents on this right now. I will when the time is right.
A quick and truthful (but uninformative) answer is to simply say that the cycles come from the people who trade the markets.
As far as news overriding the cycles just keep in mind the fact that most of the time the news is made by people too. People also make news in cycles.
On top of that natural disasters also happen in cycles.
So with that in mind even if it's nature and the news (or the other way around) that makes the market move it is still happening in cycles.
DionysusToast
Legendary member
- Messages
- 5,965
- Likes
- 1,501
dude ....a market is always trending........you just have to drop up or down to the trending timeframe
respect......some nice insights
N
Well, that's true and it isn't.
Let's say you are looking at a 15 min, it consolidates, so you drop down to 1 min, that consolidates so then you...
On Friday, the ES stayed in less than a 4 point range most of the AM. Now - I don't care what timeframe you look at - that is a market that is consolidating.
