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Cycle Indicators

Cycle indicators are oscillating indicators that can be used to analyze market cycles. According to cycle theory, stock markets have a tendency to oscillate in cyclical patterns, or waves, from periods of bullishness to periods of bearishness and back to periods of bullishness, and so on. These cycles appear to be repeated with a degree of regularity that allows technical analysts and stockmarket traders to forecast and anticipate price reversals at key cyclical intervals. However, shorter cycles are present in shorter time frames with smaller cycles operating within larger cycles. It is this phenomenon that makes cycle analysis difficult as, at any moment in time, a shorter cycle may be moving upward while the larger cycle is moving downward.

Fortunately, there are several cycle indicators, such as the Commodity Channel Index (CCI) and the Detrended Price Oscillator (DPO) that can be used to analyze the cyclic nature of securities and stock markets for a given time frame.

Wealth Warning

Trading equities, options, derivatives, currencies and cryptocurrencies, commodities or any other financial security can offer significant returns BUT it can also result in significant losses if the market moves against your position. It requires a strong commitment to skill development, knowledge acquisition, and emotional control. It should be treated as a business with a clear business plan, proper risk analysis, and a defined set of attainable goals. The risk associated with trading the vagaries of the stock markets is probably the most important consideration as it has a profound effect on a trader's emotional control. You should not trade the stock markets with money you cannot afford to lose as there is considerable exposure to risk in any stock market transaction.

Furthermore, the past success of any trading method, strategy, or system is only indicative of future success. Under no circumstances should past success be misconstrued as a guarantee of future success!

Unless otherwise specified, the trading systems and strategies discussed on this website are intended for educational purposes only and are not meant to recommend or promote any trading system or strategy. You are expected to do your own research and testing to determine the validity of a trading method, system, or strategy on the market and instrument you wish to trade.