Learn how the Market Matrix cycles can
transform the way you trade and help you to become confident
whenever you enter the market. Once you learn how to use the cycles
correctly, it is unlikely that you will ever look at a stock
again without thinking about where price is in relation to the Matrix
Beginners and sometimes even
professionals face difficulty in identifying the end or beginning of a
new trend. Very often, by the time a trend is identified, most of the
price movement has already occurred. Thus, in practical terms, even the
best traders find it hard to capture more than 60% of a rising or
declining trend in the price of an asset. Of course, most traders
capture far less than this or even lose money because they enter at
exactly the wrong time, very often just
as the trend is ending.
Now, imagine if there is a trading
system or software
product which could enable you to precisely identify
where the end or the beginning of a new trend will take place. A trader
with a good understanding of such a system would be able to enter and
exit much earlier than others, and with a much higher degree of
confidence, thereby maximizing their potential gains.
The Matrix Matrix is one such tool
which enables the analysis and an accurate forecast of an
in the trend of any stock, index, commodity or currency pair.
A more detailed explanation of the
cycles and details of where to buy the Matrix add-on software follows
but this Market Matrix Cycles video will also
give a trader/investor a very good
basic introduction to the subject.
Before we discuss what Market Matrix
cycles are all about, it is better to have a quick background
understanding of Delta trading strategy. A theory originally devised by
Jim Sloman, he discovered that within a given time frame, all assets
traded in the financial markets form repetative cyclical patterns with
approximately the same number of major high and low turning points. By
extending these Delta turning points into the future, a trader can
forecast with reasonable accuracy the timeframe at which point a trend
change will take place in a market.
Jim Soloman passed the discovery of
these cycles on to Welles Wilder, the creator of RSI (Relative
Strength of Index) - a popular technical indicator, who explained the
discovery in his book, The Delta Phomenon.
Now, coming back to the Market Matrix cycles, after further analysis of
the Delta theory, the Matrix creator Steve Copan came to the conclusion
fundamental errors with Delta and further developed the theory,
discovering additional cycles on other time frames, and fine
tuning the system for determining the turning points.
A good understanding of
Market Matrix cycles, coupled with
analysis studies taking other technical indicators
into consideration, such as Fibonacci time and price retracements, and
wave theory, can lead to pinpointing the turning points with
a remarkable level of accuracy.
is a Cycle?
Any cycle can be defined as a series
of events which repeat in the same order. A calendar cycle, for
example, comprises of 12 months beginning 1st January and ending 31st
December. Within a calendar cycle, there are repetitive events such as
change in seasons (spring, summer, autumn and winter). These events are
referred to as points within a cycle. As the calendar cycle repeats,
these events are bound to occur again and again in the same order.
A balanced up and down movement within
these cycle points will look as shown in the image below.
Fig 1: Basic Cycle Pattern
For quick reference, a numerical
representation of the events can be plotted as well. Being a repetitive
pattern, predicting one or all of the events or turning points in the
next cycle should be an easy task for anyone.
Now, what is very important to
that according to Steve Copan, there is also a possibility of an extra
point before, afte,r or on either side of the first point in a new
Matrix cycle. This extra point is referred to as an inversion point.
The inversion point alters the high or low of the subsequent turning
points, as can be seen in the images below. However, the important
thing to consider is that based on whether the point 2 is a high or low
in a cycle, the rest are not interchangable and can therefore be used
to enter and exit trades with a very high degree of confidence.
So far, we have only
discussed a simple cycle, which has a fixed length of time
with set points or events within it. Now, let us turn back to the
Market Matrix cycles which are slightly different.
Market Matrix Cycles
There are 89 Matrix cycles in total.
All of them are based on planetary cycles, for example:
Earth cycle – Time taken (Julian
year - 365 days) by earth to complete one revolution around the sun.
Lunar cycle – A lunar year of 12
synodic months (354 days - 11 less than physical earth cycle).
Single day – One rotation of earth
around its axis (360 degrees).
Four days – 1440 degrees completed
by earth’s rotation.
Matrix Cycle: 4 days in length
This is the shortest of the Matrix
cycle and is of 4 days in length.
Matrix Cycle: 4 weeks in length
Being extremely short time periods,
both MCI and MC0 cycles would only be of practical use for day traders.
The rest of the main cycles that are
the perspective of an end-of-day trader or investor, are as follows:
Cycle: 118 days in length
This equates to 4 lunar months or 120
degrees of a lunar year. Additionally, the MC1 cycle can
invert and has 11 matrix points.
Cycle: 1 lunar year in length
12 lunar months or 354 days of earth
days. This cycle can also invert and has 12 matrix points.
Cycle: 4 years in length
16 seasons or 1461 days – one calendar
day added to include a leap year. The cycle can invert and has 18
matrix points. The important point to remember is that there will be a
compulsory double inversion if the MC3 cycle inverts.
Cycle: Also 4 years in length
4 years or 1461 days and is commonly
referred to as a business cycle. There are 8 matrix points and it never
Cycle: 19 yrs and 5
This matrix cycle will never invert
and is 1 metonic cycle in length – a straight line interaction of
sun-moon-earth interaction. The mc5 cycle has 16 matrix points.
Cycle: 76.6 years in length
The MC6 Market Matrix cycle is 76.6
years long, roughly equating to the average human expectancy and has 18
matrix points. Only a double inversion is possible.
The length of the next cycle is 304
years. Thus, it is not practical to look into cycles beyond
MC6 since there is a lack of data to analyze. However, it should be
remembered that there are cycles, which run for millions of years.
MC1 Market Matrix cycle explained in
There are some basic rules governing
the identification of points in
all the matrix cycles. Once a trader understands how to plot the points
in MC1 cycle it would become easy to proceed in the same manner in the
next higher cycle. The MC1 cycle can be identified with clarity in a
On average there will be only up
to three (out of the 11)
individual Matrix points within each quarter of MC1 cycle.
The MC1 points
can occur three to four days earlier or later relative to their
average position. In indices, the point 1 usually
forms around the beginning of the first quarter of a cycle, near the
Red line in the Matrix grid. In the case
of commodities and currency pairs, the first MC1 point tends to develop
elsewhere in the cycle (plus or minus 60 days – white line in the chart
shown above) and around the end of second quarter of MC1 cycle
in the case of
The completion of MC1 point 11
paves way for the beginning of the
next MC1 cycle. However, the point 11 can develop a little earlier
thereby giving time for an intermediate turn before the formation of
point 1 of a new MC1 cycle. This additional point is referred to as an
point, represented by a number shown in brackets.
The exact timings of points 11, 1
and 2 can be affected by the appearance on an inversion point. eg: when
point 11 comes early, it may be an indication that there is likley to
be an inversion (11) before point 1 forms.
To identify where the exact average
a matrix point is, there will be a need to study at least 8 MC1 cycles
Big price moves are usually seen
near point 1. Thus, a trader can easily look for this volatility to
quickly identify where point 1 is most likely to be.
In a similar way as can be
wave theory, there will always be small and big
price moves within a cycle. This
can be explained by the fact that a price movement (in the MC1 cycle)
which syncs with the primary trendy (Elliott impulse wave), or higher
matrix cycles – MC2, will
result in an overall bigger price movement. On the other hand a
corrective wave price
movement which tries to defy the primary trend in the higher cycle
(MC2), will be a smaller one.
It can be safely argued that as
the MC2 cycle is up, each and every matrix point in the MC1 cycle will
be higher than the previous one respectively, and vice-versa in a down
trend. If the uptrend in the
MC1 cycle coincides with a downtrend in a MC2 then the resulting high
or low MC1 point will be below the previous high or low MC1
point. Only those inversion moves that may happen at the beginning of a
MC1 cycle can be an exception to this rule.
It is often the case that
an inversion point will occur whenever a turning point of the larger
cycle is due. In this case when and MC2 point is
due it is likley to take place in sync with an inversion in the MC1
Around the inversion
zone, price may not move in tandem with the higher cycle (MC2) point.
inversion point causes confusion for market participants and triggers
wrong entries so traders should take care as it is often very difficult
to ascertain as to whether an inversion has taken place or not until
the next point is in place.
a trader will not only be able to see the formation of higher highs and
higher lows but also the contradictory move as shown in the image
below. The end of the primary trend is confirmed when the market moves
below the previous MC1 point.
When the market is bullish, all the
high points should arrive on time or late in
their position, where as all the low points are expected to arrive
early or on time. Thus, when
point 11 arrives early in an uptrend, there is a higher probability of
an inversion point forming. Similarly, in a bear market, the low
points will arrive on time or later in their position whereas all the
high points should arrive on time or
MC2 Market Matrix cycle explained in
All the rules governing the
identification of MC1 points apply to MC2
cycle as well. Additionally, the following criteria should be applied
to mark the MC2 points manually on a chart:
Between two MC2 points there cannot
be more than three lower time
frame (MC1) highs in a row unless one of them is an inversion point.
This means that if there is an inversion point in MC1 cycle then we can
have as many as four MC1 highs in a row.
When multi-time frame
cycles are trending in the same direction, the price movement will be
larger and sharper.
MC3 Market Matrix cycle explained in
Similar to MC2, all the rules
governing the identification of MC1
points apply to MC3 cycle as well. Additionally, the following criteria
should be applied while marking the MC3 points manually on a chart:
Between two MC3 points there cannot
be more than three lower time
frame (MC2) highs in a row unless one of them is an inversion point.
There is always a compulsory double
inversion in the MC3 cycle. So, if the
MC3 point 2 in a previous MC3 cycle is high then obviously because of
double inversion MC3 point 2 in a newer MC3 cycle will always be a high
Again, the rules governing the
previous Market Matrix cycles apply to
the MC4 cycle as well. While manually marking the MC4 points, a trader
should remember the following points:
Finding solutions for the cycles and
marking the turning point timings on
a chart manually can be a difficult and tedious task and as such is
suseptible to human error which can be expensive if you get it wrong.
The Market Matrix add-on for Sharescope can automate the
process as it comes complete with the timings for 15 major markets
already built in. These include the S&P-500,
The add-on software is seamlessly
integrated into ShareScope, the
fundamental and technical analysis software. One additional major
beneft with the ShareScope
is that it comes complete with data feed, so there is no need to
subscribe to an external
data feed as well. Also, the databases are downloaded and stored on
your computer so you are able to do any analysis even at times
when an internet connection may not be available.
The easy to handle menu driven
software includes Matrix grid templates,
Matrix Cycles timings for many markets and Matrix Pivots all in one
The Matrix Cycle
points (MC1, MC2, MC3 and MC4), Matrix Templates and Matrix Pivots can
be applied directly on daily, weekly or monthly charts. The Matrix
Cycles add-on software has
been programmed with information to show Matrix Cycle points, Matrix
Matrix pivots for the next 20 yrs.
The Matrix cycles software is a must
for those traders and investors who wish to have a clear insight of the
ups and downs in a financial market. This add-on software enables a
trader to remain stress free and trade the big swings.
For a better understanding of Matrix
Cycles and a full explanation of the rules, Steve Copan's book,
The Market Matrix priced at GBP 195 is an essental read. Whilst this may seem quite a lot
for a book, please remember that it is a trading system that
you are buying, not just a book. The e-book
explains every detail of the Matrix Cycles. For
easy reference, there is a specific page dedicated to each of the
individual matrix rules with high quality color charts.
this 138 page book also has a separate chapter dedicated for Fibonacci
and LUCAS numbers. The chapter also explains the link between the
Matrix points and the Fibonacci / LUCAS numbers. Another special
chapter has been dedicated to the use of Elliott
wave theory alongside the
Not only the wave
structures and patterns are discussed with color charts, but also the
influence of certain waves on special matrix rules.
Finally, there is also a chapter which
teaches a simple trading system
using the MC1 and MC2 cycles, for beginners to apply and start
profits from the market.
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