Thursday, February 20, 2014

If you seek knowledge here, you will be rewarded!!!

Market trend moves up and down at different degrees along with rhythmic price change. Applying cycles to wave helps me to look for evidence of pending direction change setup.

What if you know where the market was going and which side of the market you should be on? What if you have a formula  that is reliable in all markets and in all time frames exactly the same way? What if your model can do just that without forecast or projection into the future but let you track or monitor progressively?

The weakness or the risk of forecasting ahead (months and weeks) is that there is a high element of failure. Cycle are not perfectly linear which is as good as all is fixed. The element of human behavior in the financial market game can distort a perfect linear cycle to a non-linear cycle (TIMING distortion) making future cycles to be potentially volatile and non-replicating.

Over the years the only thing I know is FIX is the DOW THEORY - Tide, Wave, Ripple concept. Despite having read this 2 pages material in Edward Magee book in 1994, I did not pay attention to the validity and potency of this concept. After having the opportunity to ponder over the past actions and results, one will wonder WHAT IS RELIABLY REPETITIVE IN THE MARKET? IS THIS REPETITIVE ACTION MANIFESTED ACROSS DIFFERENT TIME FRAMES AND MARKETS? CAN I DEVELOP A TOOL OR MODEL TO CAPITALIZE ON THIS?

The whole basic foundation of the markets is IT IS NEVER LINEAR with human actions. Bill Williams in his book TRADING CHAOS which I bought in 1995 strongly advocate Elliot Wave. But the biggest takeaway from the book is market is NOT linear.

The non linear actions resulted in different market patterns and influencing the analytical indicators. My disagreement with most authors is the emphasis on VOLUME including Bill Williams. Where is goodness, I will adopt.

With the materials available, I develop my own approach to Cyclical Wave Trading. Like any sensible person the next obvious question can I develop indicators just to track and confirm the cyclical movement using existing indicators and modifying them? There is no need to reinvent the wheels.

I have been trading on the Cyclical Wave Concept for years and happily trading all different markets.     

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