FLD category interaction


#1

Hi Guys
For now I am working on FLD category interaction.
I have 2 question about that.

  1. is it possible then the market do not complete the 8 categories before starting a new one.
    Ex: the market go trough A TO F and start a new A or he have to complete all categories before start a category A.

  2. what’s happened in Bear market is the categories are inverse?
    Ex: for category A the market cross below the FLD , then bounce back for B category etc…
    Thank you
    Bernard


#2

Hi Bernard,
Hope youre well, good to see you again. The interactions do this specifically, because the cycles on (probably) smaller time frames are very bullish. This promotes a stretch in price upwards. They take place, but are “compressed” and ultimately dilated by this compression. This produces a shorter 80 day cycle (nominal). An example is found onthe chart, where there is no H interaction. This is hard to understand. But from the chart below you will see. Also, yes, you are correct, the interactions are upside down. Maybe somebody or a couple more people can weigh in, please.


#3

I have found using the default FLD trading strategy (trading the 20 day cycle using the 20 day FLD with 3 interactions of the 20D, 40D, and 80D cycles) works well when the 80 cycle is visually dominant. When it is not, as in Derek’s peso example, the interactions are sometimes buried by the trend (either up or down). The S&P since the 2/2016 low is another example where just looking at the 10 week cycle can be confusing.

Below is the MXNUSD cross weekly using the nominal model with what my Hurstonian eye sees as the dominant cycle. I have added estimates of where the G and H interactions might occur.

B and C are a little fuzzy (again, because of the strong up trend), but overall it makes sense to look at the bigger picture first, then drill down to the day-to-day details. However, this doesn’t help if you prefer to only trade a shorter time frame. As always, flexibility and use of the advanced computer between our ears is important.

Maybe David H. can weigh in.

Curt


#4

Hi Derek
Thank you to reply, I am well thank you, I hope you too.
thank you for your answer its nice when we can help others.
the hurst theory so interesting.
Yes is difficult to understand the 8 categories are not always present, from your experience what is the shorter category you faced.
I love it I try to work on excel then this way it make me understand better how it works.
In Bear market you telling they are inverse, which I was believing, ex: the A category cross below the FLD and so on…
Sam from sentienttrader just tell me my mail they are not. Did you discover something?


#5

They are always present but a fall in amplitude (change in underlying trend) can mask them. In Derek’s example above the F category is earlier thsn labelled and coincides with the 20 day cycle low. Then comes a brief capitulation via the H category. In an idealised situation of a dominant 80 day cycle, strong 20 day amplitude and sigma-l flat the interactions would be very clear.

Combine a few degrees of interactions to mitigate against the masking and give you a better picture. For example look at the 20 day FLD interactions (80 day trading cycle) along with the 40 day FLD interactions (20 week trading cycle).


#6

I have also found that looking at the 20 day FLD using 30 or 60 min bars helps get a better picture of very nuanced interactions when the trend is strong and the cycle you are trading is not visually evident/dominant. Also, calculating the FLD using not only median price but also the high and low price sometimes sheds additional light on things. As Dave mentioned above, the picture will ultimately become clearer if you look at interactions in multiple time frames.


#7

Hi Curt, sorry to reply so late but busy, very interesting point , thank you for the info I will study that


#8

Thank you David.
I am going to study that