|
| 1. Jesse Livermores Secret To Success
|
| 2. Home page investor image explanation
|
| 6. How to win in the stock market
|
| 7. Commandments to follow
|
| 8. 10 Rules for Investing
|
| 9. How to survive a stock market crash
|
| 10. William J ONeil, CANSLIM
|
| 11. Barry Ritholtz keep it simple stupid
|
| 12. Gerald Loeb how to win
|
| 19. Indicators Introduction
|
| 21. Richard Wyckoff method
|
| 22. Richard Wyckoff Waves of Price and Volume
|
| 23. Richard Wyckoff is a success story
|
| 24. Richard Wyckoff logic not working, this maybe why?
|
| 25. Richard Wyckoff studied Jesse Livermore
|
| 26. Bob Evans, renowned Wyckoff teacher
|
| 27. Tim Ord, Secret Science of Price and Volume
|
| 29. William Gann life story
|
| 30. William Gann Law of Vibration
|
| 32. Wyckoff method improved1
|
| 33. Wyckoff method improved2
|
| 34. Original Wyckoff and Wyckoff 2.0
|
| 35. Wyckoff 2.0 vs Others
|
| 36. Wyckoff 2.0 and Volume Spread Analysis
|
| 41. Cycles for short term speculation
|
| 47. RTT Wyckoff Short Term model
|
| 50. Proprietary Indicators (PI)
|
| 51. Multi Time Frame (PI)
|
| 54. PI: RTT TrendPower OBV
|
| 55. PI: RTT On Balance Volume
|
| 57. PI: RTT Rainbow Bands
|
| 60. PI: RTT Steps of Cause and Effect
|
| 61. PI: RTT Wyckoff Strength Weakness
|
| 62. PI: RTT Wyckoff Price Waves
|
| 63. PI: Proprietary Indicators Caution
|
|
Indicator Library
Jim Hurst method
|
|
|
The originator of this method is from the writings of Jim Hurst.
James (Jim) M Hurst is a legend to knowledgeable individuals interested and involved in the study of cyclical price movement in the financial markets.
By training and background an aerospace engineer, he was the first true pioneer in the computerized research into the nature of stock price action, devoting many years and over 20,000 computer hours to this study. His conclusions were first documented in his groundbreaking classic, The Profit Magic of Stock Transaction Timing.
The work of Hurst inspired cycles analysts who came later, and represents the most important factor behind the work later done by such cycles luminaries as peter Eliades, Jim Tillman, Walter Bressert, and Brian Millard.
First, let's review some basic cycle terminology.
Click for popup. Clear your browser cache if image is not showing.
Jim Hurst published his methods in the book called 'The Profit Magic of Stock Transaction Timing' (see our education page). Hurst determined that a price series may have dominated cycles that can be used to time stock transactions for profit. You can also learn more via our  videos.
How would Hurst Trade:
In short he would:
1) Find the dominant cycle or cycles: One can use the basic eyeball method or as we prefer the readtheticker.com 'RTT Cycle Finder Spectrum' tool to determine dominating cycles within a price series.
2) Find the sub cycle by dividing the dominant cycle in half. (Example: A dominant cycle of 80 would have a sub cycle of 40). Of course, you can use other lower period cycles that have a good Bartels value.
3) Time your stock transaction with turns of (2) within the trend of (1). See more on the subject under the post titled PI:Price to continue or reverse?
Note: We use the RTTHurstDPO or the RTTHurstROC to time price action to the dominant cycle.
To use the full set of Hurst tools you require a membership to RTTIndicators. Standard indicators have limited Hurst Cycle functionality.
Please review the 80 period cycle within the SPY ETF (image below). The dominance did not really start until mid 2008, then it has led the way of nearly all major market turns. You will need to search far and wide to find a better leading (not lagging) stock timing indicator than the Hurst cycle. However, like anything a cycle dominance can fade, dominance can shift, therefore one has to be diligent and monitor a price series closely. The chart below is an example why Hurst was successful. Price and their underlying cycles can be predictable and therefore stock transaction timing is very possible and can be very profitable.
Click for popup. Clear your browser cache if image is not showing.
The Hurst cycle we use is a sine wave filtered by price, the higher the correlation of price to the sine wave the less the sine wave is altered. Thus allowing one to view good and poor periods of price cycle behavior.
Click for popup. Clear your browser cache if image is not showing.
If you find multiple significant cycles, you can plot them together and then combine them to see the master cycle.
Click for popup. Clear your browser cache if image is not showing.
Or it might be best to study multiple cycles individually.
Click for popup. Clear your browser cache if image is not showing.
Cycles do exist in the market or any time series. Just check out these cycles lows found on the Dow Jones.
Click for popup. Clear your browser cache if image is not showing.
Once we determine the dominant cycle, a scientific method is required to measure the performance of price relationship to the cycle. Future price action is always an 'unknown', but we can say that future price action will take one of three forms:
(i) Conform to the cycle.*
(ii) Temporarily trend in an inverse manner to the cycle. *
(iii) Break the cycle, as to render cycle influence as random.
*These periods are excellent opportunities to profit.
The following chart highlights the two tools we use to measure price action with the dominant cycle, the RTTHurstDPO and the displaced moving average. Hurst expected price to conform to the cycle by the completion of the half cycle, but Hurst understood that price in trends can temporarily inverse to cycle, this is accepted as long as price reaffirms its relationship to the cycle by the next swing.
Click for popup. Clear your browser cache if image is not showing.
When price action fails to obey the cycle this is called an inversion. How to judge possible inversions is a technical art that the Hurst analyst must master.
Methods available are:
1) Apply a displaced simple moving average to the price, displacement being half of the cycle period. If price fails to break the average then the price is likely to inverse to the cycle.
2) Apply the RTT HurstDPO. If the DPO price breaks the cycle swing, then the price is likely to inverse to the cycle.
3) Apply the RTT TrendPower tool, to determine if the strength or weakness of the trend concurs with expected cycle outcome (note: if the cycle period is 80, then use 40 within the RTT TrendPower indicator).
4) Apply methods from the Wyckoff and Gann tool chest. Gann Angles, Wyckoff market phases and volume patterns will increase your odds of correctly determining a price inversion to the cycle.
Example: Gann Angles help with the determination of price inversion to the dominant cycle.
Click for popup. Clear your browser cache if image is not showing.
Readtheticker.com Cycle Finder Spectrum
We have incorporated the latest advanced mathematics to find within a price series sample:
1) Cycles with significant amplitudes
2) Rank cycles with their 'Bartels Significance Value'.
3) Determine win loss percentage of cycle profitability to price.
The 'RTT Cycle Finder Spectrum' is a pop out tool within the members area. It is designed to scan for cycles while you are building an analysis or cycle chart. There is no charting functionality within this tool.
The Bartels Significance Value
Developed by Julius Bartels, a geophysicist who worked at the Carnegie Foundation in Washington in the 1930's. The advanced maths measures the stability of the amplitude and phase of each cycle. The method provides a direct measure of the likelihood that a given cycle is genuine and not random. The closer the cycle Bartels value is to zero, the less likelihood the cycle has been influenced by random events, and therefore significant to the data series.
To conclude: The lower the 'Bartels value' the more significant the cycle to the price series sample used.
We color code the report table for easier use, as follows.
Red < 2.5
Blue < 7.0
Green < 12.0
Any reading over 7.0 requires an eyeball determination as to the cycles significance. For readings over 12 the cycle is unlikely to be significant, and more likely to be random. Cycle readings below 2.5 are considered to be significant. The 'Bartels value' does change over time for each cycle period, therefore regular monitoring of the price series to cycle dominance is required.
Examining the profit win loss percentage of cycles is another tool to use to determine the dominant cycle. This is very useful when you have a cluster of low Barbels cycle scores.
Recently we found a dominant cycle within the SP500 index, that had a Bartels score of 2.0245, a win/loss count percentage of 80%, a win/loss SP500 points of 85%. Knowing this cycle I made very sure we did not invest against it. Whereas the general market participants had no idea of this dominant cycle and most likely suffered a loss. Further, it is great to have an indicator that is 80% accurate, it is even better when you add our proprietary RTTTrendStatus and RTTHurstDPO tool to make the percentage chance of success even higher.
Another point to note is that a Bartels scan is cumulative over the data sample selected, that is it examines all data over the cycle period selected. This is not like stock scans for RSI levels or MACD levels which are at a point in time.
Example output from the readtheticker.com 'RTT Cycle Finder Spectrum'.
Specification are:
Symbol: SPY
Run to last date (optional): 04/01/2010
Manual cycle period selected (optional): 78
Max cycle periods to scan up to: 150
Daily data sample size used: 750 days
Max daily data sample available: 4325 days.
Click for popup. Clear your browser cache if image is not showing.
See why Bartels Significance Values do matter.
Click for popup. Clear your browser cache if image is not showing.
This is the methodology used to determine win loss percentage of cycles related to price time series.
Click for popup. Clear your browser cache if image is not showing.
We also take a portfolio approach with Hurst logic. For example, we scanned the NASD100 index to find the dominant cycle. This turned out to be cycle period 78. Then we wanted to find stocks within the NASD100 that are most sensitive to cycle period 78 for our portfolio. The results follow. Click for popup. Clear your browser cache if image is not showing.
The above Hurst cycles are adaptive cycles to price action. Readtheticker.com can also draw standard swine wave cycles (these cycles do not change with price action) for those folks who follow Wall (20 week) and Kitchin (60 or 180 week) cycles, and the cycles can be combined for cycle trend studies.
Example
Click for popup. Clear your browser cache if image is not showing.
Here is an example of standard (fixed) sine waves and adaptive sine waves confirming price action.
Click for popup. Clear your browser cache if image is not showing.
If you are a fan of the Wall and Kitchin cycles, then the follow chart is an example of them:
Click for popup. Clear your browser cache if image is not showing.
The following chart is an example of other tools used with cycles tools, below is RTT Steps and RTT Squeeze with RTT HurstDPO.
Click for popup. Clear your browser cache if image is not showing.
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote...
..."By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and what point the greatest resistance is to be met"...
William D Gann
.."So you think money is the root of all evil? Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men are able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value(...) Money is made possible only by the men who produce. Is this what you consider evil?"..
Ayn Rand
..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”...
Paul Samuelson
.."I never found beauty in the longing for the impossible and never found the possible to be beyond my reach"...
Ayn Rand
..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”..
Bernard Baruch
Created on: 8/25/2010 4:46:29 AM Last Update: 11/29/2017 12:23:18 PM Posted by: RTT
|
|
We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund
|
|