Trading With Cycles
Thank you for visiting 40YearCycle.com…
As this site attempts to convey, there is an undeniable cyclicality to life… and to the markets… and to the economy… and to droughts & floods… and to geopolitical struggles… and to earthquakes & volcanoes… and to manias & crashes, etc. There is a time – and a cycle – to everything.
What does the 3rd chapter of the book of Ecclesiastes say (later popularized in 1965 by The Byrds)? …To everything there is a season and a time…
Cycles measure time. As such, they also measure time between related events and ‘seasons’ in life.
That brings up another perfect example of cycles: Seasons… (also known as ‘climate change’ – 4 times per solar year). The seasons of the year provide a textbook archetype of many of the larger seasons in life (fractals)… all of which are cyclical.
But that is not the point of this discussion…
Trading Cycles
Many of the visitors to this site have one primary objective – learning about trading with cycles. With respect to that pursuit, I have some good news & some not completely good news. First, the not completely good news:
I do not believe that trading with cycles – on their own – is a prudent approach to the markets.
In order to understand why, please see ‘Cycles Intro’.
HOWEVER… (now for the good news), there are several trading tools – that when integrated with cycle analysis – provide a more effective approach to trading/investing. It is the synergy of these complementary approaches that enhances the use of cycles… and makes them viable.
The majority of those tools are technical (chart-based analysis) and provide much clearer and more easily defined signals and risk points for trading and investing.
Setting the Stage
In contrast, cycles provide a foundation on which to construct a successful approach to trading. They are the backdrop. They set the stage.
They are like viewing a Map App before a road-trip begins (or just viewing a map or road atlas, for those not fully in the digital/tech age). The approximate timing & distance are identified – often with great precision – but the specific nuances, landmarks, detours, freeway entries & exits, etc. are not recognized until the ‘driving directions’ part of the app is activated and the driving has begun.
Although a user might not see it, that is when a host of other indicators kick in – attempting to pinpoint every twist & turn in a journey (or trend)… which brings me back to the focus on technical analysis…
There are many specific tools that can be used to enhance the effectiveness of cycle analysis and to take it to a practical level. We use a proprietary combination of indicators – most of which are revealed to our subscribers – in order to achieve this goal (see Tech Tip Reference Library for specific indicators, including their calculation, illustration and implementation).
Bottom Line
Cycles are an extremely valuable tool for timing overall events… but they should be viewed as a tool, with specific uses. Other tools are usually necessary to complete each task… and other indicators are necessary to effectively trade the markets.
In the case of my approach to trading, I use specific ‘setup’ signals, ‘trigger’ signals & ‘confirmation’ signals – in that sequence – to help validate cycles and take them to a practical level. These are explained in various sections & pages on this site and at www.insiidetrack.com.
And, with regard to any analysis that refers to the markets or investing, it is important to remember:
Futures Trading & Speculative Investments Do Involve Substantial Risk!
Thank you for your interest in our services & publications.
Gratefully,
Eric S. Hadik – President
INSIIDE Track Trading