All markets are affected by cycles, but not all markets are affected by the same cycles. There is value in breaking down cyclicality into groups. For instance, cycle analysis of a stock market index can provide a top-down view of the market.
Markets trend. Markets consolidate. Different market environments require different technical tools and methodologies. For instance, leaning on a traditional moving average crossover system can be effective in a trending market but ineffective in a sideways consolidation. Cycles are primarily a mean-reversion tool. Therefore, cyclical analysis is less useful in a trending environment and more effective within a consolidation or trading range..
MarketCrafts is consistently making efforts to identify the dominant cycles in different asset classes and their harmonics. We apply our moving average envelopes & valid trend lines to phase the cycles and get the trades which can be in our favor. Sometimes cycles fall before or after the specified time period, that’s called left or right translation. So, we try our best to take the trades which have higher probability of turning in profit.