econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 17 February 2017

Stock Cycles

by Brandon Wendell, Online Trading Academy

Online Trading Academy Article of the Week

The markets and individual securities routinely fall into cycles that are measurable and predictable. Socioeconomic and market conditions may themselves change but the cycles still tend to prevail, especially for the duration of the trend. Traders who can identify both the cycle and the current location of price in that cycle are more likely to be successful in timing their entries and exits.

In traditional technical analysis there are a lot of long term established cycles that influence the broad markets. However, as traders, we want to focus on the shorter time frame cycles that will influence our securities while we are in positions.

A cycle is measured by the distance between lows. This is also referred to as the frequency of the cycle. In trader terms, the frequency will tell you when to expect lows or moves to the downside in price. Once you identify the stock's cycle, you have a higher probability for trading in the right direction.

How to use cycles as an odds enhancer when trading.

As I previously mentioned, cycles are measured from the lows. There is a cycle tool on some trading platforms that will allow you to line up vertical lines with the lows on your price chart. Don't worry if the lines do not match every low, as there are multiple cycles affecting the price at any time. You want to locate the dominant one that you can trade with. That will be the one that contains the majority of the lows.

How to find the cycle of a stock or market.

We can do this study on any stock and for any timeframe.

What is a stock market cycle?

The cycles will be more stable on longer term charts, but knowing the cycle can assist you in your trading. If you see price approaching a supply or demand level but the cycle is not indicating a top or bottom, the level may have a higher probability of breaking. But if the cycle top or bottom is near, the levels are more likely to hold.

How to chart stock market cycles.

Online Trading Academy's Core Strategy partly relies on using multiple time frames for proper analysis. When we look at the higher timeframes, the cycle lends itself to assist the trader in deciding which direction they should trade in. When the trader then drops down to a lower timeframe to identify entries and exits, the cycle can be used as an odds enhancer for seeing whether the demand and supply zones are more or less likely to hold.

If the trading platform you use does not have the cycle tool, you can still easily locate the cycle of your security. Start by marking the lows and then count the number of candles in between those lows. They should be relatively similar. You can then take the average between those lows as your stock's or market's cycle.

So while it is not a perfect indicator, (there is no perfect indicator, decisions should be made from price) the cycle of a security can be a good odds enhancer when you are trading. To greatly improve your chances for success in trading the markets, visit your local Online Trading Academy Center today and enroll in a course.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Is Growing Household Debt An Economic Counter-Dynamic?
A New Era of Central Banking?
News Blog
Time Crystals: How Scientists Created A New State Of Matter
Cost Of War Against ISIS Reaches 11 Billion Dollars
What We Read Today 25 February 2017
Candid Camera Classic: Dirty Clean Words
How Reliable Are GDP Consensus Forecasts?
What You Don't Know About Your Policy Can Hurt You... Financially
The Revolving Door
Historical Echoes: The Legacy Of Freedman's Savings And Trust
Infographic Of The Day: Major Cruise Ship Accidents
Early Headlines: GOP Senators Back Russia Probe, Industry Appeals Fiduciary Rule Verdict, Pot To Produce More Jobs Than MFG, New Arms Race, Aramco IPO May Disappoint Saudis And More
Who Are The More Dependent Parties In The Brexit Scenario
Super Bowl LI Drew 4th Largest TV Crowd In History
We Taught Bees To Play Football So We Could Learn About Their Brains
Investing Blog
Babson's Ten Commandments Of Trading
Investing.com Weekly Wrap-Up 24 February 2017
Opinion Blog
In Defense Of Greece: An Open Letter To The IMF
As Trump Flounders On Foreign Policy, Russia Flexes Its Nuclear Muscles
Precious Metals Blog
Deflation And Gold: A Contrarian View
Live Markets
24Feb2017 Market Close: Wall Street Rose From Session Lows To Close In The Green Near The Unchanged Line, Short-Term Indicators And Analysts Questioning Continuing Bull Run
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved