Time cycle trading is a very unique and powerful approach because it focuses on "time" rather than "price." It is based on the belief that market history repeats itself and trends reappear after certain intervals.
Its biggest advantage is that it can alert you before a trend even begins.
Here are some key features of time cycle trading:
TIME RULES
TIME is the most important factor in forecasting market movements. While SPACE and VOLUME are important and momentum is also a factor to be considered, TIME will overbalance both SPACE and VOLUME and arrest momentum.
DAILY TIME RULE
A minor change occurs every 7, 10, 14, 20 and 21, 28 and 30 days. This time period is only a proportion of the major cycles.
MONTHLY TIME RULE
Changes in trend occur every 30, 60, 90, 120, 135, 180, 225, 270, 300, 315, and 360 days. The third and fourth months are the first of importance for a change in trend; the sixth next; then the ninth; and twelfth most important.
1. When to buy, not just what to buy.
Most indicators (such as RSI or MACD) tell you whether the price will go up or down. But time cycles tell you when a change is likely to occur.
Example: If the cycle is 20 days, you'll know that a market reversal is possible on the 20th day.
2. Predictive Nature (Prediction in advance)
Indicators are 'lagging' (they give signals after the price has already moved). Time cycles are 'leading'. They help you determine the dates of upcoming turning points (highs and lows) in advance.
3. Precision in Entry and Exit
When you combine Time Cycles with Price Action, your "Stop Loss" becomes smaller. You can try to enter very close to the bottom or top because you know that the cycle is about to end.
4. Psychological Edge
The most tension in the market arises when we don't know when a sideways market will end. A time cycle trader knows that the "time" is not yet complete, so they can wait patiently.
An Important Point
Selecting the right stocks is the most important thing. Time Cycle trading doesn't mean you should trade blindly. Its effectiveness comes into play only when:
Time + Price: When the cycle time is complete and the price is also at a support/resistance level.
Confirmation: Confirmation from a candlestick pattern is essential.
Its biggest advantage is that it can alert you before a trend even begins.
Here are some key features of time cycle trading:
TIME RULES
TIME is the most important factor in forecasting market movements. While SPACE and VOLUME are important and momentum is also a factor to be considered, TIME will overbalance both SPACE and VOLUME and arrest momentum.
DAILY TIME RULE
A minor change occurs every 7, 10, 14, 20 and 21, 28 and 30 days. This time period is only a proportion of the major cycles.
MONTHLY TIME RULE
Changes in trend occur every 30, 60, 90, 120, 135, 180, 225, 270, 300, 315, and 360 days. The third and fourth months are the first of importance for a change in trend; the sixth next; then the ninth; and twelfth most important.
1. When to buy, not just what to buy.
Most indicators (such as RSI or MACD) tell you whether the price will go up or down. But time cycles tell you when a change is likely to occur.
Example: If the cycle is 20 days, you'll know that a market reversal is possible on the 20th day.
2. Predictive Nature (Prediction in advance)
Indicators are 'lagging' (they give signals after the price has already moved). Time cycles are 'leading'. They help you determine the dates of upcoming turning points (highs and lows) in advance.
3. Precision in Entry and Exit
When you combine Time Cycles with Price Action, your "Stop Loss" becomes smaller. You can try to enter very close to the bottom or top because you know that the cycle is about to end.
4. Psychological Edge
The most tension in the market arises when we don't know when a sideways market will end. A time cycle trader knows that the "time" is not yet complete, so they can wait patiently.
An Important Point
Selecting the right stocks is the most important thing. Time Cycle trading doesn't mean you should trade blindly. Its effectiveness comes into play only when:
Time + Price: When the cycle time is complete and the price is also at a support/resistance level.
Confirmation: Confirmation from a candlestick pattern is essential.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.