The Financial Wave Theory -- Hurst taken to a whole new level


#1

Dear All,

I have spent the past three years researching Hurst cycles. I have come up with a discovery that I feel the responsibility to share with you ALL.

Regards,
Ahmed Farghaly


#2

I wanted to find something more timely based in your representation of “Wave Theory”. Below is your forecast for AUDUSD on 06/07/17 on some other forum. Would you care to comment?


And another your prediction.
image
And yet another one. I like this one best.

“The 2009 low is expected to reoccur in 2017 and hence we can expect a bankrupt United States government before the end of next year or the year after at the latest.”

You got to keep emotions away from your forecasts. What is going to happen is not necessary what we would like to see. Is it?


#3

The images you present is very interesting. I may have been wrong on AUDUSD but look at the dates of the turning points on the Dow Jones. and FYI this was in the very early days of the theory. Read the thesis bro. Your jealousy has spilled all over the page.

Regards,
Ahmed


#4

Common! if you just presented few forecast I would keep my mouth shut. But putting yourself in same line up us Hurst and Gann !? That is a bit too much for my blood. And as far as your 3 years research into Hurst theories? Some on this forum have research cycle for longer time than you kicked the grass.:female_detective:


#5

I never put myself on the level of Hurst or Gann. I am just a humble guy trying to make a living. Thanks for your input. I would like your view on the theory though… without having preconceived biases

Thanks


#6

What theory? Right a book you’ll make some money. Don’t try to trade it.
Chek Using Hurst Bandpass Filters you will learn something.


#7

I am not a trader. I seek to call long term moves 6 months or more. I have found this theory to be the most fruitful in that regard and so has everyone that ever read it. Please don’t attack and/or insult after all I am a man sharing knowledge which is very scarce in regards of cycles. In anycase Good luck

Ahmed


#8

Obviously, no insult was given or intended. But moving price line from one part of 18 month or 18 year cycle to the next to predict future price movements is not a theory or the answer. I am afraid you are missing something very crucial.

Future price is more complex than reflection of the past. Future price is past price augmented by failure of present expectations. Future is always changing and reliable horizon for the forecast can not ever be longer than a half of the smallest cycle in your forecasting model. Dwell on it.


#9

Hi Ahmed,

I had a read through this, somewhat skimming parts I had already seen you discuss on your videos. Some parts are flawed, some are interesting. For example you state that all market movement is the sum of periodic functions. This is, according to Hurst at least, not true. There is a decent (but small) amount of totally random ‘noise’ contributing. Worth noting.

The really really long term cycles are interesting. However I find myself asking what is the point past academic exercise? Anyone fancy trading the 162 year cycle?

What I would really like to read is what exactly is the mechanism that CAUSES these perioduc fluctuations in financial markets. Now that would be something new.

David


#10

Dear David,

Thanks for your reply. I do agree that there does exist an element of randomness in the marketplace. That would be impossible to discern or predict on a prolonged basis. The bigger the picture you look at the more harmonious and non random it becomes. Hence in terms of your idea of the 162 year cycle being untradable. I respond by saying that trading is secondary to economic forecasting from my current perspective (taking into consideration my investment objective, career prospects and natural interests). Hence knowing our position within the Jared or Enoch wave can aid the analyst in determining what probabilistically lies ahead for the economy and hence one can create a portfolio to weather such a climate. I am looking into portfolio optimization based on similar cyclical circumstance

Regards,
Ahmed


#11

Hi Ahmed thank you for the reading. Where have I seen the similar cyclical circumstances before? I remember something written but haven’t heard anything since.


#12

Hi Derek,

I appreciate your kind words and good will. I used to be a member of several other groups when I was conducting research (don’t want to say which for the sake of not promoting). I am preparing a revision of the paper since as you can tell some of the analysis was wrong from a short term perspective.

Ahmed


#13

Hello Ahmed,
Here is 98.1% correlation DJIA in the past data. it is not a prediction only a curiosity. Your thoughts?

Best Regards
GB


#14

90% of correlated periods are coincidental. You need to match corresponding cycles in order to arrive at what you are looking for – a reliable forecast. Reference the FWT paper it has many examples and ways of figuring out if the correlation is coincidental via periodogram comparison its helpful but sometimes can be incorrect. My answer to you is this, does your phasing support this projection line? if yes then rely on it if no then toss it.

Regards,
Ahmed


#15


You see the similarity between the similar cyclical circumstances? This is not coincidental if phasing agrees, presented below is the phasing.

1/USDX chart

The similarity in trend is what results in the correlation. JM hurst was a Fing genius for this, it is unbelievable


#16

One thing is clear you do not respect other people’s work. If you looked carefully at my charts one thing is clear, it is the projection line. I do not need to match corresponding cycles. I know how and why cycles are superimpose. On the other hand, you have very few examples of fractals, most are rescaled to feet you needs. YES, there is such a thing as fractal nature to the markets but unless you now why, scaling fractal to you needs is easy and deceptive. Good example is magenta fractal.

I am trying not to decarage you or diminish your keen observation about fractals , I only caution others not to fall into this trap, the crucial part is missing . if you did not make your outrageous claims I would not even comment. The best test to prove any theory is to apply it to every time frame sucssesfuly. I don’t think you can do it.

Regards

GB


#17

Dear B3cker,

Everything I have stated makes sense theoretically and can probably be proven mathematically. I am not trying to prove the fractal nature of markets since it has already been proven before. What I seek to prove is the repetitive nature of the price structure and how knowledge of the trend can aid in determining peak and low translations. It is not the only answer, it is a very useful aid in the analysis for speculative purposes… You just have to find the portion in the price history that has a similar trend to where we are right now in order to have an idea (simply an idea) of where prices are headed.

Regards,
Ahmed


#18

You scale to account for variation, i.e. you sync up corresponding troughs by stretching or shrinking the similar cyclical circumstance what is left after the last price is your projection, it should have high correlation considering that, after accounting for variation, you will have high out of sample correlation for some time, this needs to be tested to see how long can we rely on the projection before variation kicks in which is usually gradual rather than abrupt. Here is an example —

Similar trend, similar price structure after accounting for variation — Charted above is an index of grains


#19

I respect YOUR work a great deal, I just tried to answer your inquiry… Please don’t misunderstand me

Thanks


#20

Sound idea, using proportionality. But needs to be proven on other time frames, hourly? Then you will be able to confirm or disprove your suppositions in real time rather than years. Try USDJPY, it ts active practically 24 hours