Look at the shape of price as it reverses from down to up.Find common times in which price bottoms.Begin with the 10-day chart, if available.The following is a synopsis of what to look for when using cycles. The above chart, for example, has V-shaped bottoms at the common reversal times. If price looks to be turning near the cycle low time, then consider buying. Tell you how typical reversals look, either V-shaped or more flat, wider looking (an Adam bottom versus an Eve bottom, if you know Look for underlying support or the stock to form a bottom, perhaps move horizontally for several price bars. Then it could reverse near the expected time. The cycle is broken and it will not work this day. When you look at your intraday chart as theĮxpected time of reversal nears, if the stock is trending higher then forget it. The low you pick may not be the lowest low of the day, but one where you can get in at a good price. Do not depend on every stock making a low 1.5 to 2 hours into the trading day. Since each stock will show different cycle patterns, you will have to do your own analysis. When price is going the reverse, based on prior cycles. I have used this technique several times for entries and it works for both end-of-day traders and can also help day traders plan Cycles can help you determine when it will be a good time to buy (look for cycles among the valleys) The first five circles bottom about 1.5 to 2 hours into the session (and you should be able to pick out the times on your intraday chart better than this one by zooming intoįor end-of day traders like me, use the cycle information to help locate times when you should focus on the stock instead of sitting and Red circles highlighting the locations when the stock made a low near the same time. You can pull the trigger (buy) with more confidence. Knowing when price isĪbout to make a low gives you an edge.
Thus, you will be looking for cycle lows: common times when price makes a low. Pretend you are interested in buying the stock at a good price. The days more clearly for this presentation.
Shown is a stock chart using a 10 day look back on the 5 minute scale, courtesy of. This article discusses how to use cycles to help time the entry and exit of trades, focusing on day trading.
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