Cycle Trading

[Duma]

I thought it would be a good idea to review how trading 3 different time frames reacted to the recent price action. Common sense says that the shorter the trading time frame, the better the results. But that did not happen for this last set of waves up that started around 10/15.

The problem that I see is the for this set of waves, the pull backs were very small, (really almost no existent) therefore reducing the positive effects of trading a faster time frame.

Several times during this run, I felt that prices were going to make a major correction, but that information never made it to the market. The end result for this run was that the best strategy was to find a resonable fast entry (60min) and then just sit on the trade.

29.6% Phase 60
22.4% Phase Daily
20.3% Phase 15

Not only was Phase 15 the worse yielding system, it also requires constant monitoring of the market to make sure all of the trades were executed when required. But don't be fooled. Given a series of waves with 67% pull backs and Phase15 will kick butt.

I am starting to believe that corrective set of waves (as I think this last run was) tend to not have major pullbacks whereas a set of waves with the major trend do.

I expect that the next series will have sharper pull backs, so what this has said to me that maybe the idea of trading 3 different time frames has a very valid basis for action. It provides a nice to way to step into a major leverged set of trades and unwind the same way.

So if one is willing to trade each time frame at 100% (leverage), the net result would have been a gain of the sum of the 3 or 72.3%. In 1x terms this is a gain of 24.1% vs about 10%.