Chart cycles


Weekly Price Movement

The chart will cycle in three level spread out over three days; it will also move three levels on the intraday scale. Weekly price movements don't mean that it is only seen on the weekly time frame. It refers to the pattern that will be seen on an M15, 1H & 4H chart over the period of a week. Institutions have seasonal variations of price movement so it can also be seen on an even longer time frame, although it would be to slow to trade effectively.


The Three-Day Cycle

When examining the three-day cycle, you should be able to identify the peak high followed by three moves down and a reversal which will form the peak low (or vice versa). Each time price drops a level; it will be referred to as Level 1, 2 or 3. At level 3 price tends to get very choppy and have a much wider range which will represent an area of profit taking for the institutions and will also signify the start of an accumulation phase before the next cycle. It is also good to remember that this can also be seen on different time frames. A good way to remember how the levels move is after a big drop; the market must chop. After three days of drop, the market must chop. After a big rise, the market needs more guys. After three days of rise, the market needs more guys.

The patterns are the same no matter the timeframe so keeping that in mind will be very beneficial for you. It is essential to be able to identify these levels and know how to count levels. You will be looking to enter a trade at peak reversals so to win in the market you should only take a buy when the LOD is set and a sell when the HOD is set. Always look at the bigger picture and see where the market is in the cycle because you can also capitalize off the midweek reversal. With awareness of how the market moves and the cycles it is easy to turn a scalp trade into a swing trade by scaling in. It is also imperative to know on an intraday trade where you are within the larger cycle and use your judgment of the trade after that. It is not wise to take trades against the longer trend if you think the cycle is only at level 1 or 2.


Accumulation Phase

This will reset the daily high/low and will often occur at 5 pm EST which is the start of the dead time in the market. This is when the US markets have closed, and before the London markets open, during this period there will be very little activity. Price will move back and forth between two price points with Institution A buying a certain amount of currency from Institution B which will cause price to rise. Institutions B will then sell to Institution C causing price to fall back down; this cycle will go in a circle until the range widens and begins triggering stops and pending orders placed by people who are breakout traders. Below is a video attached to show examples of everything taught in this lesson.