Daily Archives: March 11, 2014

Cycle phases: how to identify them

Think about you are a trader and you want to profit from the price movements in the short term in the stock markets. Think about you have identified a bullish trend, but you know that stocks go up and down in a long-term direction. What are you looking for? Short-term trends (or cycle phases).

We have already written about trends and the strength of them. Now the point is how to earn money with trading if you are a very active investor.

Cycle phases in T-Advisor

The four charts above point the four main cycle phases. In T-Advisor we identify them with a U (from UP) and with a D (from DOWN). They are signalling different movements into a general trend: for instance, there is a D2 although the general trend is bullish.

Shortly, a U1 is the beginning of a short-term upward trend. The trader should take into account the entry price. A U2 points a brake in this trend. Be careful, because you have already some earnings. You have to take into account a sell price.

A D1 announces the beginning of a short-term downward trend: it is time to sell and enjoy the earnings. A D2 shows the end of this movement. If you have not sold before, just wait till the short-term direction changes. If you have any stock, maybe it is time to follow the prices to buy in the right moment.

Cycle phases in T-Advisor

There are also some other charts, as the one above, that combine two cycles in the same pictures. These are quite important, as they are pointing the exact moment of the changing trend. For instance, the chart above is the change from down to up: then it is time to buy.

Learn about these short trends let the investor foresee the market movements and how to react. For a trader, this information is vital. That is why we always insist that figures, charts and data are the main strength in T-Advisor for their users.