Future Trends from Past Cycles: Identifying Share Price Trends and Turning Points Through Cycle, Channel and Probability Analysis
$18.21
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| Format |
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| Pages |
391 |
| Published Date |
2010 |
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.
Author’s Introduction:
It is now just about ten years since I wrote my last book, Channels & Cycles: A Tribute to J.M. Hurst. I have been gratified by the response I have had to that book and the many kind comments I have received about my approach to trading on the stock market. I still acknowledge that Hurst set me on the road along which I have been travelling since that time in 1979 (is it really 30 years ago?) when I picked up his book The Profit Magic of Stock Transaction Timing. This book was reprinted by Traders Press in 2000, and I urge readers to take advantage of its restored availability.
For those around when it was first published in 1971 it was a breath of common sense in showing what is possible when approaching the markets with a measured, logical technique based on firm mathematical and scientific logic. New readers will see it in a different light, because now there are many authors and many software packages that use these important principles. To these new readers it might not now appear as revolutionary as it did when first published, but they will still enjoy Hurst’s writing style and the book’s logical approach to the improved timing of buying and selling decisions.
When considering a title for this book, I started by thinking about what goes through a trader’s mind when contemplating a trade. It is usually: ‘I think the price of this security will rise/fall within n hours/days/weeks/months.’ The thought process of a much smaller number of traders will be: ‘There is a high probability that the price of this security will rise/fall within n hours/days/weeks/months.’
Provided the second type of trader has carried out his analysis carefully, he will in the long run be more successful than the first type of trader. You can now see my dilemma in choosing the title for this book. Should I stress the novelty aspect of using cycles in a way that hasn’t been attempted before, or should I stress the importance of making sure that probability is always on your side? In the end I opted for novelty, being aware that novelty is always appealing.
Readers of my books on channel analysis will be aware that the most difficult aspect of that technique is in deciding when a channel has changed direction. How the channel has behaved in the gap between its last calculated value (half of the span used to calculate it back in time from the present) is open to interpretation. It is this which has been the subject of my research over the last ten years and which lies behind my writings in this book.
In Channels & Cycles I made the point that channel analysis could be carried out with a paper and pencil and that a computer was not strictly essential. However, the study of cycles and their relationship to channels has now moved on so much that a computer is absolutely essential. Some of the scans of cycles that I will describe take tens of millions of calculations to perform and quite clearly a fast computer is therefore essential.
Except for the cycle scans described in this book that are unique to the packages Channalyze and CCS Visions, the isolation of single cycles can be performed by any software package that allows you to specify your own calculations. These types of calculation can also be carried out in a spreadsheet application such as Microsoft Excel. Of course, in all of these cases a good amount of accurate historical data is required so that long-term cycles can be studied.
Channels can be drawn by Channalyze, but for other software packages a paper and pencil can still be useful for drawing constant depth channels based on a centred moving average which has been calculated by the computer software. These constant depth channels should not be confused with Bollinger bands, which virtually all software packages can produce. Bollinger bands are not of constant depth and, unlike channels, bear no obvious relationship to cycles.
I chose the title Future Trends from Past Cycles because it clearly describes what the book is all about. Although no mention is made of channels in this title, channels are an essential part of taking an investment decision. The channel is based on the future trend, but knowledge of the future trend does not in itself give the trader the optimum time to place a trade. I took a rather different approach in Channels & Cycles, placing more weight on a discussion of channels and less on cycles. The balance in this book is reversed, since quite clearly all channels are derived from cycles, or rather sums of cycles.
Contents:
- Risk and the Markets
- How Prices Move
- Simulating Future Movement
- Cycles and the Market
- Trends and the Market
- Properties of Moving Averages
- Averages as Proxies for Trends
- Trend Turning Points
- Cycles and Sums of Cycles
- Bringing it All Together
Future Trends from Past Cycles: Identifying Share Price Trends and Turning Points Through Cycle, Channel and Probability Analysis By Brian J. Millard pdf
4 reviews for Future Trends from Past Cycles: Identifying Share Price Trends and Turning Points Through Cycle, Channel and Probability Analysis
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Judah Davidson (verified owner) –
Ive read many of Brian Millard’s books and this one dosrn’t dissapoint.
You need the software to use the techniques properly.
Niko Walter (verified owner) –
If you have appreciated any of this author’s previous books then you should find this one useful also. I bought a hard copy when it was 1st published; it is obviously a better price now — I would recommend the Kindle version (not actually got it myself) because you should be able to enlarge the numerous diagrams that are essential to understanding the text. The hard copy printing is rather strange — the pages are of sufficient size to allow bigger diagrams/chart but many of them have small printing on the axes which makes it difficult to follow at times. In fact if you really need to see the nitty-gritty then you will need to use a magnifying glass (I do have normal vision I hasten to add!). Not withstanding this, the content is up to the author’s normal high standards — Everything is explained and quantified in a proper scientific manner.
As a previous reviewer has remarked, you do need the authors dedicated software to practise his techniques most effectively — although he does explain how to do it by longhand/the hard way. Strangely enough, throughout the whole book the author only refers to “suitable software” without promoting his own product which in reality is essential to get the best out of the techniques he recommends and explains. All the diagrams and charts in the book are reproduced from his software. You can still obtain software and you may find it a little “buggy” and it can be prone to crashing. However, the benefits it produces are well worth such small irritations. When used properly this software is incredibly accurate.
The book goes on to explain all about cycle analysis and specialises in the techniques of using the software to make effective trades. The techniques contained are not really suitable for day/scalping traders although I personally quite often use the book’s techniques on trades lasting perhaps one or 2 days. Used effectively, the software allows good trading for swing and position traders. It is important to thoroughly understand the principles used in this book and for that purpose I would consider it essential to read the author’s previous book “channels and cycles– tribute to J Hurst”. Both of these books require the reader to put in a decent amount of effort — the mathematics are actually very straightforward but if you’re not prepared to solidly study and grasp the principles of cycles in trading then don’t commit your money!
I recommend this book and suggest that you treat it like an academic textbook. I would definitely get the Kindle version if buying again.
Jayla Holt (verified owner) –
This book focuses solely on price and time in order to attempt to predict where price might go in the future. There is just too much more available to the market follower today for this book to be relevant. It’s a bit of a hard read but you can feel the earnest hard work of the writer who sincerely attempted to uncover time and price based turning points in the form of recurring cycles.
This type of a study lends itself to a bygone era when this was all they had available in order to attempt to predict market turns. This is no longer the case and as such unfortunately makes the premise of the book hard to accept.
Karen Garza (verified owner) –
First, the text is very clearly presented with easy to read graphic examples. Prose is well edited but for a few of the charts which have incorrect labeling – minor inconvenience.
In a nut shell, per Millard, only about 10% of scanned stocks have recent cyclic behavior well enough defined to apply this cyclic analysis to ferret out the exact cyclic clusters. Millard teaches you how to segregate and then identify these cycles. Second, for these selections, Millard then takes you to the next step of applying constant vertical height envelope channels. The cyclic appearance and the envelope should agree otherwise the stock selection is rejected. Finally, Millard applies his proprietary probability analysis to project a likely price target. This technique is basically a normal distribution gleaned from the recent past price activity and then custom projected forward in light of current cyclic extrapolations. Thus, recent probability of price activity confirms / rejects channel analysis which itself is visually tied to a study of recent stable cyclic activity in share price movement.
If you have Milllard’s Channalyze software (about $900 US) for a stand-alone version which works on daily / weekly data, then the whole thing really hangs together. You don’t really need the software but it’s worthwhile as a context identifier, that is “Where are We, Where Will We Likely be Going”?
Other context alternatives, aside from Hurst’s groundbreaking insights, which come to mind are: Fibonacci Ratios; Elliott Wave Analysis; Gann Analysis; Geometry of the Markets, Planetary Harmonics. You get the idea.
Millard is an empirically oriented scientist. His approach is mathematically founded and is scientifically (statictically) verified. The difference between a Millard and say a John Ehlers is that Millard is a wonderful tireless instructor with a fine gift of prose and takes great pains to get his point across to we “Lay people.” Ehlers can be a challenge. Millard presents a complete system of contextual analysis, Ehlers presents trading ideas but not a complete contextual analysis. With Ehlers I have the impression that you get the ideas, even the code, and then you can implement it in EasyLanguage on TradeStation. I’m sure that a lot of people like that.
Millard also wrote his Channels and Cycles but, while the presentation is in agreement with the current selection under review, the selection is a tougher read. His Channel Analysis, The Key… is a much better read, easier to understand and complements the subject selection being reviewed very well.
I have studied Bressert’s cycle material, Hurst’s cycle material (including his course), Ehler’s material,and some of the material from the Foundation for the Studies of Cycles (including their TechSignal software). In my opinion, Millard’s Channalyze software along with his clearly written instructive material takes the insight originally provided by Hurst to a modern accessible level complete with a stated methodology to make it useful.
In conclusion, one caveat. Millard does not present a “Holy Grail.” His is a mathematically founded system (with software available) built to provide an empirically verifiable method relying on the eye-brain connection which will yield a context for gleaning probabilistic future share price movement. No buy / sell signals are given. That’s for you to follow up with once you have this shot at a framework (context) of current price performance and likely upcoming share price performance for those selections which pass muster as amenable to cyclic price analysis.