All About Tine Cycles – Part One - By Profit Max Trading
A good time to work on achieving trading success ... “There are cycles in everything. There are cycles in weather, the economy, the sun, wars, geological formations, atomic vibrations, climate, human moods, the motions of the planets, populations of animals, the occurrence of diseases, the prices of commodities and shares and the large-scale structure of the universe.” Ray Tomes’ Cycles
I direct your attention to the above cyclic events so you have the opportunity to become familiar with the subject of Time Cycles. Because Cycles are found in EVERYTHING, including price behavior, they can provide futures and commodity traders with an edge in timing trades.
To take full advantage of cycles in trading requires you either spend a considerable amount of time and expense to learn how to extract timing signals for yourself, or you take advantage of a service that provides this information for a nominal fee. Either way, using cycles to help you time your trades can provide an edge not found by other means.
There is much information available on the Internet about Cycles that you may wish to study.
So how can Cycles give a trader the edge? It all comes down to ‘timing’. If a trader is able to determine with accuracy beginning of a new trend or perhaps end of a trend correction, the trader can then enter the market at a price that presents low risk exposure with excellent opportunity for gain. One reason many are unable to profit from trading is that they have been entering trades too early or too late as well as not knowing where to place their protective stops.
If a trader had a very good idea as to where the market was likely to reverse, there would be little question as to where to place the protective stop and where to enter the trade.
Of course having this timing edge is only a part of overall trading and investing success Others include managing the trade once it enters profit territory and have the mental fortitude to stick to a trading plan. But with that said, determining the likely direction of the trend and where turns are likely to occur plays a very important part of the complete trading plan. It is with Cycles a trader can anticipate the new trend or end of a correction better than anything else.
So why aren't Cycles used commonly among traders? There are several reasons, none of which reflect negatively on Cycles themselves as a trading tool. Some fail to realize that market behavior is not a random event but instead one based on Cycles (Natural Laws). Others do not wish to take the time to fully understand what Cycles are and how they can benefit from them. And of course some simply are not aware of them to begin with.
For the latter reason, hopefully this multi-part series on Cycles will be an eye-opener. Because no one can change the course of market cycles, it does not matter how many are aware of Cycles or decide to use them. Perhaps it is also Natural Law we will continue to have a skeptic majority when it comes to successful analytical approaches to market timing to insure we will continue to be able to use Cycles in effectively timing trades. Does it matter?
Before we get deeper into the subject of Cycles in the following parts of this series, it should be noted Cycle Analysis is only a tool for timing. It is not a complete trading system or the only tool you may wish to use when planning trades. However, when it comes to timing, it is perhaps the best timing tool you can have in your trading arsenal.
This completes Part One.
We all know stocks are constantly on the move. Do you know which stocks are at the top right now? If you are trading stocks, this free, dynamically updating list of the 50 Top Trending Stocks can be extremely helpful. This complimentary list is updated every day and is based on MarketsClub’s “Trade Triangle” and “Smart Scan” Technology.
Top Dividend Plays (Stock and ETF)…
When your baby-sitter knows that the market is on a roll, there is no question it’s a bull market! It may also be time to keep an eye out for a correction.
No one knows when a correction will take place and you don’t want to miss gains in a bull market. So what do you do?
Easy! Continue buying good companies with outstanding fundamentals, but look for “defensive” sectors and throw in some outstanding dividend payouts for good measure.
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