Get started

Cycles

⚡️ Crypto Insights ⚡️ #2 - Altcoin CyclesIn this visual we can see an orange graph overlaid onto the BTC price chart for the last peak back in April. This orange graph represents the collective market cap for all crypto excluding BTC. We can see that the price of altcoins lag behind the price of BTC and actually top around around 3 weeks after the peak. If you go back and look at the ATH at the end of 2017 you will see a very similar pattern. Altcoins tend to lag a few weeks behind BTC and, therefore, peak after BTC highs also. If you are an investor, this is a key sign to watch out for and if you have made significant gains will give you a strategic exit.
COINBASE:BTCUSDEducation
by Flow_Capital
Fourier: Interpreting and Over-interpreting Frequency AnalysisGreetings to all! In this post, I'd like to share some thoughts on frequency analysis based on Fourier transform. This mathematical method breaks down data into cyclical constituents (frequency components). Then the importance of each frequency component in the original data is expressed as the square of its amplitude, that is, power . Some time ago I published a Pine Script implementation of the Fast Fourier Transform (FFT) algorithm. I made it specially designed to be used for filtering data based on its frequency content. The concept of FFT filtering is well known and quite simple (for detail, see the link to my script below). When it comes to frequency analysis , that's a whole different story. Using the power versus FFT frequency plot (i.e., the spectrum ) to study the data is an extremely popular analytical technique in science and technology. But with financial data, it is tougher than it sounds. When dealing with noisy, non-stationary and overall uncertain price data, the FFT never works as well as it does in math textbooks. Here, to illustrate the capabilities, limitations, and some myths of frequency analysis, I generated artificial price data, applied an FFT to each price column, and plotted a power spectrum as a function of time (i.e. a spectrogram ). The spectrogram shows frequency information along the vertical axis. The lowest frequency content is displayed at the bottom, the highest frequency content is displayed at the top. Frequencies are given as the number of cycles per sample size (256 bars in the above chart). Power levels are defined by the color map shown to the right. As for the generated data, it is basically a random walk with a few non-random constituents added at given time intervals (sinusoidal functions and a gap). Now let's discuss a few aspects seen in the chart: 1. True periodicity Starting on a high note, if there is real oscillatory behavior in the data (see the green and red areas in the above chart), the FFT can reveal this quite well. The problem is that the frequency resolution is heavily influenced by the sample size. For example, with a sample size of 64 price bars, it is impossible to resolve cycles longer than, you guessed it, 64 bars. It should also be noted that the ideal deterministic sinusoidal functions shown in the above chart can never be found in real market data. 2. Discontinuities If there is a gap, it's bad. Gaps, that is, discontinuities in the data, are prominent features that have broad and smooth frequency spectra that can overshadow other features. If you google "Fourier transform of a step function", you can see what I mean. Thus, if a gap occurs somewhere within the sample window, the Fourier spectrum is unlikely to be reliable. 3. Random walk This is not surprising, but even purely random data can produce rich frequency content. It is even difficult to tell from the spectrogram where the purely-random area changes into the one containg a sinusoid. (Well, if we accept the random walk theory of markets, the last comment does not make much sense. But here we are talking about syncretic data). The situation, however, becomes much more fun if we analyze the change in data per bar (i.e., data - data ), rather than the actual data. In the case of a random walk, these changes are purely ... well, random. And it is known from textbooks that the Fourier spectrum of random noise contains only noise. However, in areas containing sine, there is an order in the data. In other words, the data is autocorrelated. As a result, the FFT spectra of the data reveal the corresponding frequency components way above the noise level. In this sense, Fourier analysis may seem as a potential tool to to test market efficiency. (There is even a Fourier-based version of the Dickey-Fuller test for stationarity of time series, but that is a different story.) However, I am not aware if it can somehow outperform the more commonly used tests. Conclusion In the context of financial time series, the Fourier transform is often associated with the estimation of marked cycles. I think that's why it has become one of the most polarizing technical tools out there. While it is certainly a powerful math tool, it is helpful to know its limitations. Can one capitalize on the revealed qualitative information about the "cycle" periods? Regardless of how to think about the concept of market cycles, I don't think so. But could the Fourier transform be potentially useful in general for analyzing price data? Definitely yes! See below for how to use FFT to filter data:
Editors' picks
AMEX:SPYEducation
by tbiktag
29
MARKEY CYCLES PSYCHOLOGY | EMOTIONS & COGNITIVE BIASES All markets go through cycles of expansion and contraction. 📈When a market is in an expansion phase (an uptrend), there is a sentiment of optimism, belief, and greed. Typically, these are the main emotions that lead to a strong buying activity. Sometimes, a strong sense of greed and belief overtakes the market in such a way that a financial bubble can form. In such a scenario, many investors become irrational, losing sight of the actual value and buying an asset only because they believe the market will continue to rise. They get greedy and irrational by the impressive bullish movement, expecting to make huge profits. As the market gets heavily overbought, the local top is created. In general, this is considered to be the point of the highest risk. In some cases, the market will start a sideways movement while smart money steadily sells the asset. This is also called the distribution stage . However, some markets don't present a clear distribution stage, and the downtrend starts sharply after the top is reached. ➖➖➖➖➖➖➖➖➖ 📉 When the market starts reversing, the euphoric mood can quickly turn into complacency , as many traders refuse to admit that the uptrend came to an end. As prices continue to fall, the market sentiment quickly moves to the bearish side . It often includes feelings of anxiety, denial, and panic . In this context, by the anxiety we mean the moment when bullish biased market participants start to question why the price is falling, which soon leads to the denial stage . The denial period is marked by a sense of unacceptance. Many investors keep holding their losing positions, either because "it's too late to sell" or because they want still believe that "the market will come back soon." But as the prices drop even lower, the selling wave gets stronger. At this point, fear and panic often lead to what is called a market capitulation (when holders give up and sell their assets close to the local bottom). Eventually, the downtrend stops as the volatility decreases and the market stabilizes. Typically, the market experiences sideways movements before feelings of hope and optimism start arising again. Such a sideways period is called the accumulation stage . ❤️ Please, support this idea with a like and comment! ❤️ ⬇️ Subscribe to my social networks! ⬇️
OANDA:XAUUSDEducation
by VasilyTrader
16
DFT - BTC: Bear or Correction? Observation: Nothings can tell me if the momentum has stopped its race for now: - No tendency change for major trends (rope). - Planty trends and/or clouds to support price drope tendency. - Volume is still green in daily on the resultant. - Waves pattern is acceptable for a round 2. => Clearly, it's a green light for the price to continue to build up in term of daily indicator (market sentiment it's an other story :p) => If the things finally turn south and you want to try a short, keep the red trend in mind. It's your last border reference before a bull/bear flippening after daily closure. This trend had been retested 3 times before the previous 2017 bull run. Gl
COINBASE:BTCUSDEducation
by Mr_Gesier
Psychology in trading. Manipulation of consciousness Bitcoin 666Bitcoin's main trend is upward. Which formed the ascending channel . Always trade with the trend. Decide in which trend you are trading and on which timeframe. Decide on strategy and risk management. Your first enemy is a lack of experience and knowledge. Your second enemy is greed and a sense of lost profits. You always have time to make money, the market will not run away from you, but money in the absence of experience and knowledge will run away. On a bull trend it is better to always work on the bull side; on a bearish trend , on a bearish side. Always follow the trend! Going against the trend is the same thing that falls under the locomotive and hoping that it will not overeat you, but will bounce off of you! There should be a strategy and plan. At the same time, your strategy and plan should be plastic from market situations. You need to not only know the rules of technical analysis , but also understand what and how and why it works. Knowledge of technical analysis and the psychology of the crowd will make you in trading - God. If you are like everyone else, then the result will be like everyone else. Those people who rely on quick profits without effort and time are doomed to give their modest deposit more smart and hardworking. For the minority to earn money, the majority need to lose money in the market. The more the majority plays according to the rules imposed by the minority, the more money is lost. Consequently, a minority earns. To earn, you need someone to lose! When a minority needs it, the rules of technical analysis stop working. The faith of the majority imposed by the minority destroys the mountains and minor minority deposits. In the game against the crowd, only time decides the question of when the average zeroing of the deposit in the average person will occur. Those traders who are sure that success depends on only one successful purchase, retention of the asset for a short time, and then sales are many times more expensive - are doomed to zero the deposit. This is what the majority think, which means that this is an erroneous opinion. Thanks to this majority faith, the minority earns. Trading is not only work - it is creativity and relaxation! Remember, trading is a game of probabilities . Who trades from the situation created in the market - earns. Who trades on the basis of what he wants - receives a loss. The crowd trades out of their desires, not market probabilities. The crowd always loses. Thanks to the thinking and desires of the crowd, we earn. There are no accidents, there are random patterns that must be understood and used. Coincidences are planned actions disguised as randomness. 369-27-669-27 3075-1170-1666-444-27-01-20 310-130-23-13-06-02-2020-13 371-27-671-27 Money is not the meaning of life, but a tool for life!!! Appreciate the time of your life in this world - this is really a limited resource . Time will pass, life will go. Have you been born in this world for a cut paper of money that you will never have in your desired quantity? Think it over. Also think about patterns. Why is it that everyone who wants to have a lot of money remains very poor. And the opposite is true - who does not pursue the amount of money, but does good deeds, receives fantastic amounts in a short time that the “supplicant” and “wait for money” will never receive for all their wretched existence. How to give such is not safe. The crowd with their desires is crazy and selfish. To give to such is tantamount to destroying them. The world is honest. Who creates - he receives. Most want to receive - but do not give anything in return. This is the secret of poverty. Understand the world, understand yourself - life will become meaningful, understandable and easy.
BNC:BLXEducation
by SpartaBTC
5
BTC FFT super cycles - Dephasing model!This is not a target, it's just the last rope which gonna hold the next Cycle! The buyers/sellers resultant= 0 is our next support bottom (We have time but keep it in mind ;) ). The new rope itself could be the resistance aswell but it will mean nobody care of the BTC anymore, then a last intermediary resistance in the node (buyers = sellers) is my most likely target for bottom (Once you see the existing rope break on after the other). Nb: Don't imagine BTC cycle with one period and one frequency but plenty with new one coming to complexify the equation in every cycle! It's more complicate than a W our a Diamands pattern than everybody try to sell you on Twitter ;)! The market is dephasing with different kind of buyers, sellers which all belong to a frequential waves system based on for example day/night, Kondratiev cycle, institution market closure, futur, payday...IA bot. Soon it will be unreadable in Micro market by too many variables and finally perhaps people will stop speaking about "manipulate market".
Education
by Mr_Gesier
Wave Cycles ExplainedThe cycle line is constructed by taking the opposite extremes of a cycle. Connecting the previous high to the subsequent low, and vice vera: connecting the previous low to subsequent high. Parallels are then drawn from the high/low, identifying the cycle channel as demonstrated on the chart. The ANGLE of the cycle gives you a roadmap into the future as to what type of move one can expect. The steeper the angle the greater the tendency for a market to rally/decline rapidly. Wave Cycles for MT4
Education
by kvzivn
Exceptional speculation from mid April '18 onwardsUsing an updated chart of earlier posted opportunity around AUDUSD (AU) I like to highlight and illustrate the exceptional speculation that has been going on since mid April onwards. The first and many incidence of the same speculation has often seen coming in very sudden which indicates a single source instead of graduate forming of buying/selling pressure you see normally when larger long term trends are forming. Only news events cause such sudden incoming interest in the buying or selling of an asset when it's coming from a group, but then there have to be a profound reason for it been in the news and it always dies out within a few hours. Quite often we have seen USD buying surges since mid April not complying with any of these rules on top of that these volumes were sometimes hidden from public pools and planned very timely to exactly block a USD bearish cycle from bringing down the value of USD or a potential opposite interest such as London open. The latter is just too silly to observe, suddenly on Tuesday morning Asia timezone when there are normally low volumes until one hour before London open, there would be a ridiculous sudden surge of GU and EU selling at a time it was never seen before. There is simply also no reasonable explanation for anybody selling GU and EU at that time other to stopping GBP and EUR from being appreciated. Nobody says a word and nobody writes about it since that I have noticed these out of place events. There are some economists speaking in youtube videos but searching for manipulation of USD returns litle results on Google and first few entries are about China manipulating their currency and Google's very nice suggestion list doesn't show a single entry when typing it out into the search field. Well, everybody knows that every single central bank is doing it, all of them. They call it market operations and it published on their websites. Look at the implementation notes published by the FED May this year or read on about RBA market operations published clear in public, just to name two examples but all central banks list it as normal operational tasks as part of their portfolio of services. Yet search seems to return limited results, making everyone believe very few people are interested in this business. Something so important as a ring-network of almighty controllers manipulating the financial market on a daily basis and nobody would be interested. That doesn't glue very well with me, censored it is, big time, for only one reason, this network of market operators have a lot to hide. More than they trying to let the everyone believe with their website publications. The dangers are that like this year the speculators are all making to believe the sudden interest is genuine, just to grow a large group of supporters because the FED know it can't beat macroeconomic cycles. At one the these will overpower the built up speculative forces against the macros over 6 months and that contr force will be stronger than ever seen on the market and speculators will realise that at one point in time and start selling on top of the macro selling pressure. That combined could give us the strongest ever seen sling back down from high up reaching far below it normally would go, the so called overshoot could reach the opposite side of the market at USDJPY 67...
Education
by Deep-Peat-Shark
Bitcoin Long Term CycleIndicators are more powerful when looking on the weekly or monthly. If we look at the 2014 cycle, I think we are around the same point today when it bottomed. As in my previous ideas on BTC, I expect a retest of 200 weekly EMA soon that could bring down price to 3200 or 3000 $, making a double bottom and starting a new cycle for the bulls. Good luck guys. -------------------------------------------------------------------------------------------------------------- My Website - Automated Strategies with Backtest and Alert Setup
BITSTAMP:BTCUSDEducation
by cyatophilum
7
Financial Market Introduction 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Financial Market Introduction 101 a) Market participants Market Participants include those parties that are involved in the operations of investment companies. Their control in the market is necessary and they should be well aware of the changes in the market. 1. Brokers and dealers handle trade activities between the buyers and sellers of currencies by charging a fee. They are the crucial part of the FOREX market, which acts as a medium between buyers and sellers. 2. Investment advisers are individuals who provide investment advice to investors by issuing reports regarding the analysis of investment securities. 3. The investor is one of the main participants of the financial market as funds are allocated to them as a capital to gain financial returns in future. 4. A central bank is one of the monetary authority and it regulates the state's currency, interest rates and money supply. Performance of the commercial banking system is also overviewed by the Central bank of respective countries. b) The Trading Market Trading market is a place where trading of currency and securities are done. The market includes brokers and investment experts who provide active services as traders on the basis of their education and knowledge regarding the market. They take investment decisions on the basis of different trading methodologies and data from past years to determine the most profitable investment. c) The Best Time to Trade Best time during the year Previous yearly records show that October and September are considered as the best months to invest in the FOREX. The main reason is due to the price bumps, which usually arises during the month of November and December, due to the seasonal changes. Best time during the Month The best time of the month to invest in the FOREX is during the first five and last five days of the month. The fact was illustrated in research conducted by Professor Ogden’s, which determines different types of investment return that are paid in the last first few days of the month. This "regularity of payments" can enable the investors to generate profit on their investments. 1. Municipal bonds interest payments are made up to 90% 2. 70% of corporate bonds principal payments 3. Preferred stock dividends are paid up to 65% 4. 45% of all common stock dividends. d) Market Cycles Market cycles are considered as the key to determining the maximum returns. The market cycle can be divided into 4 phases: Accumulation Phase • The accumulation phase arises after the market decline and experienced traders start to buy after figuring that the worst position of the market is ended. • At this time period, currency price valuations are pretty enough that they can play an essential role in profit generation. However, in this stage, prices are flattered and every seller in the market knows that the buyer will get a healthy discount. Mark-up Phase • A Mark-up stage the market stability moves forward towards the higher market moves. During this time media stories usually determine that the worst period of trading is over, however, increase in unemployment can arise during this period. • At the maturity of this phase, investors use bandwagon because of their fear regarding the decrease in market prices. A bandwagon is a group including technicians who analyses the market prices to recognise the changes in market direction and sentiment. The Distribution Phase • Within this time period, sellers dominate the market. The bullish market sentiments can turn the market cycle towards the mixed sentiment. Prices in this phase stay locked, which can last for some weeks and months. • Even the timing models do not flash any signals to buy the currency. This phase can be affected due to the bad economic news or adverse geopolitical event. Mark-Down Phase • This stage can be most painful for the investors, those who still hold their previous FOREX reserve can get huge losses, as they would have to sell them even at the lower prices at which they have bought the currency. • However, this phase determines the buying signals to the early innovators, which can enable them to generate returns in future once the prices got higher. This stage also demonstrates that it is not the good period to sell the FOREX. e) Days of the Week 1. Throughout the whole week, Monday is considered as most the best day to buy FOREX, as the prices usually show a decline. A study conducted on "A Survey of the Monday Effect Literature" reveals that decline in the prices can be the reason of bad news that was released during the weekend. 2. Conversely, if Monday is considered as the best day to buy FOREX, Friday is determined as the most feasible day to sell it. As it is better to sell the reserve before the weekend due to changes of price decreases which can affect the profitability of investment, in case of selling it at lower prices on Monday. 3. Heading towards Tuesday trading can flourish a little. The reason behind this fact is that opinions are formed by the traders and they have started taking their positions in the market. Therefore, this can make a good day for trading in the market. 4. Wednesday shows the same kind of trend in trading followed by Tuesday or usually depicts bigger price moves and is considered as the second-best day of the week for trading. 5. Thursday, it quickens. Thursday is considered as the days when huge profits can be made by the investors. Investing in the right currency can enable the investor to generate huge profits. f) Hours of the Day Trading in the morning time is not a good idea as market prices and volumes can change roughly. It is assumed by experts that these are considered as volatile hours and several new releases can affect the investment outcomes adversely. However, trading in the middle of the day can be favourable for the investor, as prices mainly remain stable during this time period. Several time frame analysis is utilised by the investor to select the most appropriate time for trading. g) Swing Approach Swing-Traders analyses the swing chart within the day so that they can take advantage of favourable price changes in the marketplace, and this affords them the benefit of not having to watch markets continuously while they are trading. Once they find an opportunity in terms of increase in FOREX prices, they place the currency on sale and then constantly keep a check on the progress of the pricing. The approach has different optimal time frames, which include: • Daily, and Weekly Charts • 4 Hour, and 1 Hour charts...... Please let me know if you would like to know more Happy trading :) "In investing, what is comfortable is rarely profitable" Robert Arnott
FX_IDC:USDWTIEducation
by SMPTrader