Avi Gilburt Blog | What Can Offer Better Market Timing Than Standard “Timing Cycles?” | Talkmarkets
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Avi is founder of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition. A lawyer and ... more

What Can Offer Better Market Timing Than Standard “Timing Cycles?”

Date: Friday, May 12, 2017 5:19 AM EDT

Other than traders of metals, some of the most emotional and angry traders/investors I have seen in the “blog-o-sphere” are those who solely follow timing cycles.   While there are many different cycles people follow, most seem to confound those who attempt to trade them.  

While there may be certain segments of time that seem to work, they often leave people scratching their heads when the market changes cycles without warning.   Well, markets don’t warn when they change their timing, do they?  And, in fact, I have seen cycles analysts blow up many of their followers’ accounts.

Now, as I went through my own search of analysis methodologies early in my investment career, I always attempted to maintain an open mind and heavily contemplated any methodology which seemed to have a following.  And, clearly, timing cycles have a strong following.  But, intellectual honesty in the market is what will maintain your account on the correct side of the market, and anything that is unable to pass the test of intellectual honesty should be viewed quite skeptically.

Along those lines, when I contemplated these timing cycles, I had an open question which no timing cycles analyst was ever able to answer:

If markets are non-linear in nature, how can a finite, linear timing window accurately prognosticate the market more than 50% of the time?   

You see, when you assume price and time are linear, you're overlooking the clear nonlinear nature of price movement. Traditional cycle analysis assumes linear and angular movement of price through time.  But, if you understand that sentiment drives asset prices and is non-linear in nature, then does it make sense that the timing of sentiment is linear?  

Do the ebbs and flows of human emotion track neatly like the hands of a clock?  Of course not. Humans’ fears and greed are not set to sixty second and sixty-minute increments anymore so than rainstorms. 

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