This Element is an excerpt from Trading from Your Gut: How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader (9780137047680) by Curtis Faith. Available in print and digital formats.
How market cycles work--and how to recognize when markets are about to change direction.
Prices move in cycles. Unfortunately for traders, these are not pretty sine-wave cycles. Market price patterns don’t repeat in regular form that’s easy to predict. However, the market does exhibit a clear up-and-down movement. The cycles occur because of pauses and changes in momentum. What causes these cycles? What drives seemingly sudden changes in direction?