John Ehlers classify Trends in 2 Modes :
- Trending Mode
- Cyclic Mode
Hi Alain,
How do you differentiate between the two modes? Is it a qualitative assessment or something more objective? My understanding is that some of Ehlerâs cycle measurement tools, including MESA, do not accommodate longer period cycle measurement so this is why he chose to define the market this way. As we all know from Hurst, trend is simply a longer term cycle measurement. The important point is that knowing the longer term trend is critical even when trading short term cycles. Hurst accounted for this in his course material, specifically with VTLs, price/FLD interactions, and Sigma L.
Curt
Hi Curt
Simple. As long as your FLDs are ineffective - because they are parallel to Price - you are in a Trending Mode
Curt
I agree with you âAs we all know from Hurst, trend is simply a longer term cycle measurement.â
As we can describe a curve as a collection or sum of straight lines, we can describe a âtrendâ as a sum of âcyclesâ of much lesser degree
This is the âfractalization effectâ popularized by Elliott : big Waves are made of little Waves of the same structure or patterns (which IMHO is dubious)
Hurst (as all cycles researchers of the FSC) told us the same thing abouts cycles : long cycles are made of cycles of shorter period
Hence the 2 and 3 relationship between adjacent periods
I also agree with you about âThe important point is that knowing the longer term trend is critical even when trading short term cycles.â
I would be more specific :
the important point is the relationship between the Amplitude of the Underlying Trend and the Amplitude of the observed Operative Cycle(s) at work within Price Action
For me as you know the Amplitude of such âcyclesâ is defined by the Gann Octave - in short 1/8 of the Price Range fluctuations
There is a point when such relationship is too important (relatively) and this fact causes the Amplitude of Cycles of lesser degree to be âflatâ , visually not observable (within the parameters)
S&P 500 on a Long Term basis shows us a very good example.
This why David has some problems when he used his FLDâs.
David has operatively improved the use of the FLDs proned by Hurst and we owed him a lot.
But David has limited his research
The key point David showed us is that structurally / by construction some FLD crossings noted BCGH are ineffective or much less effective to define target price than others noted ADEF
But if the demonstration is great to show us how FLDs work theoretically , operatively the demonstration is limited by 2 points ::
b) more important the Davidâs demonstration is valid when using a flat or neutral Underlying Trend
the key practical question is :
In short To differentiate between the two modes, Trending Mode or Cyclic Mode, there always will be some qualitative assessment, but I am convinced we can improve the objectiveness of the parameters on which we base our judgment.
As for the DAX, the Underlying Trend (sum of all cycles whose period is greater than 256 TD / 1 Year ) contribution to the Uptrend since the Low of March 2009 was 6 000 points and the Amplitude of the Enveloppe 256 UT (brown) was 2 x 1250 points = 2500 points
The signal cycle interactions shift from being median price crosses to reaches/touches. If the next degree higher FLD is related to the dominant cycle (visually apparent) the signal cycle interactions change from being reaches/touches to crosses. So for example in a bearish âtrendâ you may have an A category 20 day interaction that is merely a touch or track. That is my experience.
As long as you use multiple FLDs with the strategy it is effective in all situations I have found. If you limit yourself to just the popular â20 day interactionsâ you can start to flouder at some of the more subtle interactions.
See above!
Thanks David_F !
For a better undesrtanding for everybody me included, could you please post some charts explaining these facts.
TIA Alain