A (are) diamond (are) your best friend, question?


#1

This refers to HC tool for MT4 as that’s what I have to play with. The diamonds, once set, are they set in stone or they can change due to later price action?

I ask because in a chat room, another guy who also are among the lucky bunch testing out the MT4 tool, he pointed out he noticed they where changing while I haven’t notice this. Not that I have been looking at it that carefully, but for some reason I had come to the assumption that once set they then never changed, in other words they are set in stone?


#2

Hi Joakim, the quick answer is that the diamonds will move if the analysis changes.

The longer version is this: the diamonds are simply marking the troughs and peaks as determined by the analysis. Hurst cycle analysis is a very dynamic process. You (or the indicator) have to constantly re-evaluate the analysis. Diamonds are only placed when there is good evidence that a trough or peak has occurred, but nothing is set in stone. Most of the time the diamonds will stay where they are, but if price action shows that the cycle action is different than expected then they will move to show the new analysis.


#3

Yes, that makes perfect sense. Who said you can’t change the past, right '-)