Indicator - Cycle
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Calculation Cycle
To build cycle we start to calculate this indicator:
I = [ 4.1*Stochastic%K(5,3)+2.5*Stochastic%K(14,3)+Stochastic%K(45,14)+4*Stochastic%K(75,20) ] / 11.6
Then we calculate the moving average from I to 9 bars :
ma = Average[9](I)
Cycle is the difference between these two results: Cycle = I - ma
Interpretation Cycle
In everyday life, cycles allow us to predict events:
For example (planetary movements,seasons etc...).
The analysis of cycles is also employed in financial markets to anticipate trend reversals.
Cycles can be used to generate bullish or bearish signals.
This analysis is also relevant to trading commodities which have seasonal variation.
Financial instruments linked to recurring phenomena like this are sometimes called cyclical instruments.
