Hey all, I am new to C2 and would like to share my approach of trading Fx particularly EurUsd.
As i mentioned, I do perform forecasting trend reversals in Fx markets, particularly EurUsd, using cycle analysis and spectrum involves a technical analysis approach that integrates several key steps:
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Identification of Dominant Market Cycles: The first step is to identify the dominant cycles in the market. This involves analyzing historical price data to detect recurring patterns or cycles. Tools like Fourier analysis and spectral analysis are being used to decompose price movements into constituent frequencies in my approach helping to pinpoint the dominant cycles.
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Cycle Length Determination: After identifying the dominant cycles, the next step is to determine their length. This involves calculating the time between successive peaks or troughs in the cycle. The length of these cycles can provide insight into the market’s rhythmic patterns, helping to predict future price movements.
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Phase Analysis: Phase analysis is used to determine the current position within the cycle. It involves analyzing whether the market is in the rising phase (from trough to peak) or the falling phase (from peak to trough) of the cycle. This is crucial for anticipating potential trend reversals.
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Spectrum Analysis: Spectrum analysis involves examining the amplitude and frequency of the cycles. By analyzing the spectrum of the market data, traders can understand the strength and persistence of different cycles. This helps in identifying which cycles are most influential in driving price movements.
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Correlation with Fundamental Events: Correlating cycle phases with fundamental market events enhance the accuracy of predictions. Economic data releases, geopolitical events, or company-specific news can often trigger trend reversals. Understanding how these events align with the identified cycles provide me a more holistic view.
Hope we alltogether get more and more pips as the price fluctuates…
Barbaros
