Yesterday I sent to my free newsletter subscribers a lesson I wrote a few years ago to deal with what I call the PAUSE formation. The reason for this was that a market that I had been sharing future cycle turn dates on had formed the early warning sign for a PAUSE formation and may present an opportunity for a trade.
At least, it will help those looking to learn more about the cycle turns, swings, pivots and other related phenomena for the cycle. The more you understand the tool or a better indicator you can use it. PAUSE formation is very simple to identify. But what I want to discuss first is what to look for to determine POTENTIAL PAUSE formation. Before we start moving forth, here is a useful source https://www.birk.no/sykkel/sykkel/pivot where you can search for pivot cycles in Oslo.
Unless you have some advanced warning, who cares what the formation is after-the-fact? Let's start with the basics. In dealing with market cycles, it should be understood that the pattern of the market is the result of the cumulative effect of several cycles. But to make it really simple, let's call each frame time of one cycle has its own frequency and magnitude.
Yes, this is very simplified, but it should help those who are new to the cycle altogether. If you look at the price chart MONTHLY, that being the price chart where each bar price is a full month of trading, you see the LONG TERM of the relevant market. We will call the GOLD market.
If we look at a MONTHLY chart of GOLD, you can see that the price is just moving higher each month. So you could say the LONG-TERM cycle moves up now. Simple to see, right? If we look at the weekly chart of GOLD, where each bar price is a full week of trading, we can see that every week to make new highs. So let's say the INTERMEDIATE-TERM cycle moves up as well.