Mastering
Hurst Cycle Analysis, by Christopher Grafton
As a trader who uses technical analysis, I found Mastering Hurst Cycle Analysis,
by Christopher Grafton
a very interesting read. www.tradersdaytrading.com
visitors and regular readers of Kennys
Technical
Analysis will already be well aware of how much importance I
place on my time cycles analysis of the markets, and exactly how
profitable it can be.
Hurst's methodology for time cycles analysis is an
extremely
useful part of that analysis, and I suggest that this manual should
make its way into every technical analysts library.
Graftons work updates and expands upon the work of J.M. Hurst,
an aerospace engineer who, in the 1970's developed a trading system
based upon applying his knowledge of cycles to the price movements
within the stock market.
JM Hurst's system of applying a series of time cycles to
the fluctuations
of the stock market includes some very simple methods that can help the
analyst to narrow down some extremely high quality trading
opportunities, and these are very clearly explained in some detail in
Mastering
Hurst Cycle Analysis.
Chris begins by giving a detailed introduction as to what time cycles
are, and exactly how they are formed. This ensures that even if the
reader is a complete novice to time series analysis, they are able to
be guided step by step through the process of performing a complete
Hurst cycles analysis of any financial market.
In his introduction, Chris
writes "The purpose of this book is to get you to the stage where you
can perform cyclic analysis on any freely traded financial instrument
quickly and effectively on your own system".
Mastering Hurst Cycle Analysis
At every stage of the process, the explanation of Hurst’s methodology
is enhanced by the addition of some very useful illustrations that give
readers that all important visual element that is required to fully and
quickly understand exactly how the methodology should be applied in
practice.
Although Chris makes it clear from the start that the practical
application of Hurst time series analysis is by no means an easy
process (Show me a successful trading system that is!), with a little
bit of perseverance and by following the few simple methods laid out in
the book, readers can soon become quite adept at performing a Hurst
Cycles Analysis in the markets that are of interest to them.
All in all, I believe that anyone interested in technical analysis
will
find it very useful and excellent value for
money, as they begin to gain sufficient knowledge to confidently use
JM Hurst Cycle Analysis methods
in their technical analysis of the
markets. And more importantly, see the results in the bottom line in
their trading account.
1. The
Properties Of Cycles
Introduction
Basic Quantities
Visualising Period and Amplitude
How Cycles Combine
Properties of Market Cycles
Conclusion
2. Basic
Tools I: Valid Trendlines
Trend and Trendlines
The Concept of Trendlines
Trend Direction
Trend Strength
The Real Nature of Trend
The Valid Trendline (VTL)
The Key Role Played by VTLs
Conclusion
3. Basic
Tools II: Displaced Cycles - The FLD
Introduction
Properties of the FLD
Plotting the FLD
Applying FLDs
FLD Combinations
Conclusion
4. Isolating
Market Cycles I
Introduction
Cycle Envelopes
Phasing Analysis Set Up
Conducting a Phasing Analysis
Conclusion
6. Selection,
Set Up And Entry
Introduction
Creating a Shortlist
Scanning Charts
Entering the Trade
Short Selling
Conclusion
7. Managing
Open Positions
Introduction
Case Study - JP Morgan Chase 2002/2003
Conclusion
8. RSI And
Elliott Wave
Introduction
RSI and Elliott Wave - The Basics
Case Study I: Gold, November 2008
Case Study II: Euro/USD, January 2010
Conclusion
Conclusion
Appendices
Appendix 1: Elliott Wave Patterns
Appendix 2: FLD Code
Appendix 3: Inverse Moving Average Code
Appendix 4: Cycle Envelope Code
Appendix 5: Diamonds Grid and Numbers
Appendix 6: Final Diamond Placement Code
Appendix 7: Discrete Fourier Transform Code
Appendix 8: Volatility Index code
Recommended further reading
The Sentient Trader
Index
Mastering Hurst Cycle Analysis : Jacket Text
One of the best classical methods of technical analysis brought up to
date
This
book offers a modern treatment of Hurst's original system of market
cycle analysis. It will teach you how to get to the point where you can
isolate cycles in any freely-traded financial instrument and make an
assessment of their likely future course.
Although Hurst's
methodology can seem outwardly complex, the logic underpinning it is
straightforward. With practice the skill needed to conduct a full cycle
analysis quickly and effectively will become second nature. The rewards
for becoming adept are high conviction trades, tight risk management
and mastery of a largely non-correlated system of analysis.
In
this extensive step-by-step guide you will find a full description of
the principal tools and techniques taught by Hurst as well as over 120
colour charts, together with tables and diagrams. The Updata and
TradeStation code for all of the indicators shown is also included.
