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TIME CYCLES: Cycles are the Most Accurate Technical Tools for Forecasting Future Tops and Bottoms

Cycles are the only technical tools that allow reasonably accurate forecasting of future tops and bottoms. The cycles in our analysis are as long as 4 years for the Stock Market, and as short-term as minutes or ticks for intraday trading. With the ProfitTrader™ Timing Bands you can forecast the most probable time periods for future tops and bottoms and plan your trading strategy accordingly.

Timing Bands are a powerful forecasting and trading tool. Based on historical cycle tops and bottoms, Timing Bands forecast the most probable time periods for future cycle tops and bottoms.

Seventy percent of all cycle tops and bottoms have occurred on, or after, the beginning of a Timing Band. Forty percent of the historical cycle tops and bottoms have occurred within the time parameters of a Timing Band. Thirty percent occurred before the beginning of the Timing Band, and 30% occurred after the end of the band.

Because price cycles are not exact and can contract and extend, a 20-day cycle will not bottom every 20 days. One cycle might be 15 days, another might be 26-days from bottom to bottom. Timing Bands quantify cycles and accommodate this shift in time. Generally, the most symmetrical, balanced and tradable cycles occur within the middle 40%, and the cycles that have a sizeable extension occur in the last 30%. It is the 30% of cycle tops and bottoms occurring before the Biming Bands that are often the riskiest to trade because a swing top or bottom can look like a cycle top or bottom until the market makes a quick reversal and stops you out.

When trading the markets, Timing Bands are a guideline to improve the accuracy of the mechanical buy and sell signals in ProfitTrader 6.0. These buy and sell signals have an average accuracy of identifying cycle tops and bottoms across all time frames of 70% to 90% that is increased when the signal occurs within a Timing Band. The Bressert BLine also identifies cycles tops & bottoms with an average 90% accuracy for cycle bottoms across all times frames, and 80% for identifying cycle tops.

Next: TIME CYCLES: The Interplay of Cycles within Cycles