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                                              Market cycles

 

  

  

 

 

                                                Description:  Learn to understand and recognize a new cycle

 Tags:  finance,market,markets,market cycle,fundamentals,technical analysis

 

Slow stochastic and mini cycles

 

Description:  Chevron stock (CVX)

2 days chart showing both bullish

and bearish mini price moves.

During a bullish cycle, the prevailing market force is bullish. 

The trend is primarily composed of mini bullish cycles but there

are also secondary diminutive bearish price-cycles which are

contra trend price-action.  Refer to the chart above.


The opposite occurs during a bearish market phase when the

number and magnitude of the mini bearish cycles are greater

than the bullish ones. Check the first chart below.

 

In a trending period, both the Moving Average

Convergence Divergence (MACD) indicator and moving averages

themselves depict the trend, but the slow stochastic indicator

mimics the minuscule cycles within the trend.

Description: General Electric stock (GE)

weekly chart showing both bearish

and bullish mini price moves in a downtrend.

With the exception of the tiny price moves, the stochastic also

uncovers all support and resistance levels when it is oversold below

25 (support) or overbought above 75 (resistance).

Description:  Intel stock monthly chart

showing the overbought and oversold

slow stochastic (6,3,3) respectively at 

resistance and support levels.

 

A resistance will become a support if the asset breaks above it

and finds support (continues to exhibit higher lows and higher highs). 

On the other hand, a price support level will change into a resistance

at the time when a financial instrument fails to rise above it after breaking

below it.  The security will continue to display lower lows and lower highs.

Attention to the two Forex training charts below.

Description:  EURUSD

daily chart showing a 

resistance which has been

converted into a support.

 

Description:  USDSGD weekly chart

showing a support which has been

converted into a resistance.

 

In an up move, one will identify a valid support price level (usually

the previous high which is now retested) where one can buy the asset.  

Conversely, in a down trend, one will spot an opportunity to sell at a

compelling resistance level where one can sell on the edge.  This method

of buying and selling is called trading on the edge.  Subsequently, in a

down-cycle, one will give precedence to bearish trades, but will prioritize the

bullish trade setups in a rising cycle.

Description: GBPUSD daily chart

showing buying points during an

up move.

Description: AUDNZD 3 days chart

showing selling points during a bearish

trend.

The slow stochastic allows day and swing traders to accurately time

the market throughout viable rending phases without trading against

MACD and moving averages.  This trading strategy of aligning both the

stochastic oscillator and MACD indicator is called harmonious trading.

Traders ought to understand that the price is the number one indicator. 

They should draw channels to underscore the market patterns and apply

a slow stochastic multiple time frame trading (top down) method to avoid

damaging errors.  We propose to traders the webpage titled slow stochastic reloaded.

Image:  Market cycle with a top and low 

 

During a bullish cycle, the prevailing market force is bullish.  The trend is primarily composed
of mini bullish cycles but there are also secondary diminutive bearish price-cycles which are contra trend price-action.  

The opposite occurs during a bearish market phase when the number and magnitude of the mini
bearish cycles are greater than the bullish.  In a trending period, both the Moving Average Convergence
Divergence (MACD) indicator and moving averages themselves depict the trend, but the slow stochastic indicator mimics the minuscule cycles within the trend.

Show a chart




With the exception of the tiny price moves, the stochastic also uncovers all support and resistance levels when it is oversold below 25 (support) or overbought above 75 (resistance).


Show chart




A resistance will become a support if the asset breaks above it and finds support (continues to exhibit higher lows and higher highs).  On the other hand, a price support level will change into a resistance at the time when a financial instrument fails to rise above it after breaking below it.
The security will continue to display lower lows and lower highs.

Show chart

In an up move, one will identify a valid support price level (usually the previous high which is 
now retested) where one can buy the asset.   Conversely, in a down trend, one will spot an opportunity to sell at a compelling resistance level where one can sell on the edge.  This method of buying 
and selling is called trading on the edge.  Subsequently, in a down-cycle, one will give precedence to bearish trades and prioritise the bullish setups in a rising cycle.

Show chart

The slow stochastic allows day and swing traders to accurately time the market throughout viable
trending phases without trading against MACD and moving averages.  This trading strategy of aligning both the stochastic oscillator and MACD indicator is called harmonious trading.

Traders ought to understand that the price is the number one indicator.  They should draw channels to underscore the market patterns and apply a slow stochastic multiple time frame trading (top down) method to avoid damaging errors.  We propose to traders the webpage titled slow stochastic reloaded.

 

 

 

 

 

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