One of the topics we discuss in our trading training course is how to recognize, utilize and understand what are trading cycles. These cycles that can occur across multiple timeframes are often misunderstood and to often disregarded by many traders.
With the influx of traders in and out of the markets every single moment of every day, markets can seem erratic. It can be very difficult, if not impossible to know the next move a pair of currency is going to make. Yes there are candlestick analysis techniques galore, but these are not always easy to recognize when forming. The problem is, we can see candlestick formations in the past easily, but actually forming takes time.
If your looking at a 4-hour chart a single bar takes 4-hours to form. If we are looking for a shooting star for example, it will take 4-hours before you know it’s a shooting star. Are you really going to sit in front of your computer watching a single candle from start to finish? I hope not!
Trade More Efficiently If you Understand Trading Cycles.
Time is money, we’ve all heard this before. If you’ve read a previous post here on Opportunity Cost, you already have an idea what that statement really means. If you are sitting for hours, you’re losing money. Therefore, you need to learn to trade more efficiently. What do I mean by efficiently? Let’s first look at the costs. What are we losing to make a trade?
One thing we lose in a 4-hour stint babysitting the monitor is time. Another is the opportunity to be doing something else; perhaps something else income producing. We also lose opportunities to take alternative trades. This is where understanding the trading cycle comes in to help you become more efficient a trader. Your goal is to reduce some of these costs.
What Is a Trading Cycle?
Once you understand what are trading cycles and how they can help you in your trading, a new world of opportunities can open up. Markets depend on a few factors in order to exist. One of those factors is people like you and me, traders. Without traders willing to trade in their money for opportunities for returns, markets would cease to exist. Opportunities are not only wealth but can also come in different forms. If we buy a product, we are trading our dollars for something we personally believe is worth more than those dollars. Among other things, it is our belief in the opportunity that moves markets.
A trading cycle is based on this thinking. As consumers across all the various assets make decisions, markets move accordingly, for the most part and excluding factors including money managers and banks, etc. But again, for the most part, it is the intraday decisions of everyday people that keep markets moving forward.
An very interesting aspect that occurs, is that overall, people tend to think and behave very much like one another. This is all a key aspect of sales but we’ll stay focused on trading cycles. Take a look a the image below.
As you can see and have probably experienced before when trading on your own, there are emotional factors at play in our decision making. Let’s say you are examining a pair looking for entry. Let’s pretend the chart your looking at is currently at the top, where the bottom chart image shown says is the Distribution Phase. According to the image in the above the chart image, this is the Euphoria stage and is moving into anxiety.
Recognizing Emotional Trading Opportunities
The key to understand what are trading cycles, is knowing this is how we make decisions daily. We can be in any one of these stages at any given moment. But, sometimes, these emotional stages can be influenced. How, you may ask? By a sale, a discount, our expectations, our perception of available opportunities. There are many methods out there that can be used to make us think a certain way.
Like I mentioned earlier, these trading cycles can usually be seen across all timeframes. When you learn to recognize these cycles and where the market is within them, you can begin to take advantage. When there are thousands upon thousands of trader around the globe all trading simultaneously, markets tend to react based on the majorities emotional perspective.
What we do here at Forex Destiny in our trading, among other things, is try and recognize where the majority of traders are mentally in this cycle. When you know where the market is in the cycle, you can in turn begin to predict where the market is headed. You then have one further confluence to make your trade determinations.
Want to Lean More About Trading Cycles?
In our 7-week course, you learn not only more about using trading cycles, but how they work in the grand scheme of our trading system. Trading cycles is just one of the topics we cover that aims to develop your understanding of how the Forex markets work. Complete with the other topics found in the lessons, you’ll learn just how we use trading cycles along with other techniques that have made our system so successful.
In the course we discuss in detail what you need to know and do in order to trade in the Forex markets like we do. We welcome you take a look at the to-date history of one of our trading accounts using our trading system. There you can see for yourself the success we’ve had trading using the same system we are giving you in our 7-week course. (Click on photo for link).
If you’d like to know more information about the Forex Destiny Training Course and how you can get started today, click on the link above. You can also visit our Forex Destiny Training System Page and click on the course. Take advantage of this amazing opportunity today and begin the journey to Discovering Your Own Destiny!