Here are some ideas for how you might use your Hurst Signals:
- Make sure that you understand the situation in each of the cycles available on Hurst Signals. It is vitally important that you understand that all cycles are influencing the market at the same time.
- Look first at the longest cycle chart: the 80-day cycle chart because that provides a good overview of general direction the market is expected to move in over the next month or so.
- Then look at the shorter term charts. Note whether the shorter cycles are moving in the same direction as the longer 80-day cycle, or moving counter to it:
- At times the shorter cycles will be moving in the same direction as the longer cycles, indicating the potential for a strong move in that direction.
- At other times the cycles will be moving in opposite directions to each other. These are often times of increased volatility in the markets.
- It is useful to then work back through the charts starting with the shortest cycle, giving you an idea of the “road ahead”, starting with the nearest time (generally about a week), and ending with an outlook for the next month or two.
- Notice particularly when turns are expected: those are the times that you would want to enter or exit your trades.
- As a turn in the market approaches you should prepare to make your trading decisions. The approach you use is entirely up to you. Here are some ideas:
- Use the FLD Trading Strategy which we teach through the Hurst Cycle Trading Academy (requires Sentient Trader software).
- Work with Hurst’s other cyclic tool, the Valid Trend Line (VTL)
- Use other methods of technical analysis, oscillators and indicators. (The Elliott Wave Principle works very well in conjunction with Hurst).
- Avoid trading a cycle when it is overpowered by other cycles (indicated by a dotted line on the chart and in the text information) because in these circumstances the cycle is unlikely to produce a profitable move.
- As a turn approaches if price rises or falls into the projected turn zone (as shown by the circle on the chart) then you should prepare to enter a trade before the projected time frame for the turn. Cycle wavelengths are subject to variation, and if a price objective has been fulfilled the turn could happen earlier than expected.
Whatever your approach is, remember that the better you understand your Hurst Signals, the greater your chances of trading success.