Future Trends from Past Cycles explains how to identify potential future trends and turning points in equity prices (short, long and medium-term) by analysing past cycles in market data. Brian Millard's renowned technical expertise and mathematical insight forms the basis of this fascinating guide, built around a blend of cycle, channel and probability analysis.
With a thoroughly documented methodology, and numerous worked examples at every step of the process, this is an exceptionally lucid and insightful contribution to the literature of technical analysis. It will help the trader to harness probabilities to their advantage, and to limit their risk, with greater precision than ever before.
Finding the key 10% with a trading triple lock
This book teaches you how to use cycles in your trading in a way that hasn't been attempted previously. At its heart are the three disciplines of cycle, channel and probability analysis, which ensure a triple lock on probability - massively reducing the blind spots and speculative nature common to more one-dimensional technical approaches.
While the general view of technical analysts is that virtually all securities can be analysed for future movement, the detailed workings and research in this book shows that this is not the case. Only a small number, around 10%, have cycles which extrapolation shows to be currently in a stable state and which therefore would appear to be predictable.
Brian Millard details the mechanics of identifying this 10% - estimating the stability of trend positions, drawing probability boundaries for price positions, and deducing the core probability of any given price trend. He looks closely at the various forms of risk at play in the markets, uncovers the hidden mathematics of price movement, and shows how to simulate future movements; as well as presenting ideas on the best new ways to read cycles, evaluate mathematical trends, plot moving averages and anticipate turning points.
Like the work of J. M. Hurst, Millard's forbear, Future Trends "shows what is possible when approaching the markets with a measured, logical technique based on firm mathematical and scientific logic".
It is the essential final book from an acclaimed technical analyst and author.
|Publisher:||Harriman House Publishing|
|Product dimensions:||6.90(w) x 9.60(h) x 0.80(d)|
About the Author
He later became interested in the work of J.M. Hurst on cycles and channels in the stock market and as this interest grew, spent time carrying out research in this field. Following his landmark book 'Stocks and Shares Simplified', published in 1980, Brian wrote a further five books on the application of scientific methods to the stock market.
His books on channel analysis are now universally recognised as taking forward the work of J.M. Hurst to a higher level by analysing price movement and especially the occurrence of predictable cycles in market data. Brian also published software to enable traders to apply his methods.
Table of Contents
List of Figures xi
List of Tables xxix
1 Introduction 1
Definition of a Trend 3
Definition of a Cycle 3
Determining Trends 3
2 Risk and the Markets 9
Sources of Risk 9
3 How Prices Move (I) 19
Coin Tossing 20
Rising and Falling Trends 22
4 How Prices Move (II) 29
The Normal Distribution 29
5 Simulating Future Movement 45
Monte Carlo Simulation 47
6 Cycles and the Market 59
Properties of Sine Waves 61
Cycles in the Stock Market 66
Research on Market Cycles 71
7 Trends and the Market 75
Mathematical Trends 76
Extrapolating a trend line 87
8 Properties of Moving Averages 91
Calculation of Moving Averages 91
9 Averages as Proxies for Trends 111
Probabilities From Centred Averages 114
Boundaries and Channels 119
10 Trend Turning Points (I) 125
Short-term Trends 127
11 Trend Turning Points (II) 145
Estimation of Channel Direction 145
12 Trend Turning Points (III) 175
Why Does Channel Analysis Work" 202
13 Cycles and Sums of Cycles 207
Extrapolation of Cycles 210
The Comparator 213
Failure of Extrapolations 234
14 Bringing it All Together 237
Four Key Steps 237