Maybe I should rename this page to the fortnightly showcase! I seem to have settled into a 2 week schedule with these updates, but the benefit is that the extra time all goes towards research. There have been a number of questions about combining the Cycle Forecaster and our S&P Forecasting service. The best way I've come up with to do this is to use the Cycle Forecaster in the background on a larger term chart to reinforce the shorter term S&P Forecast. Here's an example from last week:
This is a 20 minute chart with the Cycle Forecaster applied. If you've read some of the older showcases, you know that focusing on the turns is more important than the direction, although both give useful information. Take a look at the forecasted top on the 24th. Since the Cycle Forecaster projects 7 bars into the future, it was very clear that a potential trade zone was approaching. Note that this doesn't mean there will be a turning point, only that there is a good chance of one. With this in mind, lets take a look at the 5 minute chart:
The minute by minute forecast for this day is shown in blue. You can see that it also shows a top in the same area as the Cycle Forecaster did. The strong rally off the open made it very clear that we were following the regular forecast shown rather than the upside-down inverted version. At the top approached, it was pretty clear that we should be looking for a sell trade. All that was left at this point was to pick a good entry point.
Since the morning trend was very clear, a simple trendline breakout was one way to do this. The Exhaustion Bar at the top confirmed things for us, and the sell was on. It was worth 25 points or so if you didn't get too greedy. I saw this one in real time, and I know a number of subscribers did as well. The trick to trading with these tools is to wait for opportunities like this that are very clear. Its better to take 3-4 trades a week and have mostly winners rather than take 15 and come out with a loss. Many traders can't stand watching the market move without them, and are always jumping in late. With forecasting technology like this, you can anticipate trades ahead of time and don't have to chase the market.
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