Many readers are baffled by my constant use of the word " Cycle".
For me, it is a mathematical algorithm of time and price which repeats at regular interval. It is different from "seasonality" and has its own variations.
"Cycles" were first introduced by Nikolai Kondratiev (also written Kondratieff) and later popularized by Joseph Schumpeter . Many theorist have worked on cycle theories over the ages and the latest are Harry Dent and JEFFREY A. HIRSCH .
Then there is Gann, and many others : Stock_market_cycles
Normal Fosback has a system where by he would buy at month end and sell at early next month and he was able to out perform the market.
You can read more about Kondratieff here: Kondratiev_wave
You can also develop your own model and now-a-days it is so easy to gather all the data from the internet.
However, most folks who develop some kind of theory about cycles tend to be rigid. But a long cycle top or bottom need not be at the same point/time. Nature's time keeping methods are little different than humans. We humans have decided that winter comes on December 21. But in some year winter comes early and in year it is late or mild. Its same with cycle tops or bottom. I use it more for direction and when I see that cycles are matching with seasonality, Technical Analysis and cash flow, it sets up a high probability trade. Nothing in life is "Guaranteed' and neither are cycles. They just help to stay away from unnecessary risk.
Trading or investing today is not about winning everytime but rather about not losing everytime and everything. So whatever helps us to avoid risk, is welcome. Just remember nothing is perfect or works 100% of the time.
Hope you all are having a great weekend.
For me, it is a mathematical algorithm of time and price which repeats at regular interval. It is different from "seasonality" and has its own variations.
"Cycles" were first introduced by Nikolai Kondratiev (also written Kondratieff) and later popularized by Joseph Schumpeter . Many theorist have worked on cycle theories over the ages and the latest are Harry Dent and JEFFREY A. HIRSCH .
Then there is Gann, and many others : Stock_market_cycles
Normal Fosback has a system where by he would buy at month end and sell at early next month and he was able to out perform the market.
You can read more about Kondratieff here: Kondratiev_wave
You can also develop your own model and now-a-days it is so easy to gather all the data from the internet.
However, most folks who develop some kind of theory about cycles tend to be rigid. But a long cycle top or bottom need not be at the same point/time. Nature's time keeping methods are little different than humans. We humans have decided that winter comes on December 21. But in some year winter comes early and in year it is late or mild. Its same with cycle tops or bottom. I use it more for direction and when I see that cycles are matching with seasonality, Technical Analysis and cash flow, it sets up a high probability trade. Nothing in life is "Guaranteed' and neither are cycles. They just help to stay away from unnecessary risk.
Trading or investing today is not about winning everytime but rather about not losing everytime and everything. So whatever helps us to avoid risk, is welcome. Just remember nothing is perfect or works 100% of the time.
Hope you all are having a great weekend.
well said, sir highly value and respect your opinion and trading style
ReplyDeleteVery cool info, thanks for this.
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