Ultimate Guide: The Hurst Cycles Trading System

In the previous article you learned “How to build a Profitable Trading System” while in this post, using the same rules, I will teach you the Basic Hurst Cycles Trading System.

This Strategy takes into consideration the Standard movement and the Influence of the trend on the Hurst Cycles.

The principal Rule of the Basic Hurst Cycles Trading System is:

Trade in the direction of the Higher Cycle finding your entry signal using the Sub-Cycles.

Easy as it sounds, read this rule again and again.

To trade this System you need to identify 3 cycles:

  • The Cycle you want to trade. (You can call it CycleX)
  • The Higher Cycle, usually 4 times bigger than the CycleX. (Cycle4x)
  • The Sub-Cycle, 4 times smaller than the CycleX. (CycleX/4)

Let’s analyse them one by one.

The Conditions

Following the previous article:

“A Trading Condition is a Market Price or Situation where there is a higher probability of a trend reversal or continuation.”

1) The Market Trend & the Cycle4X.

It’s already taken for granted that, in order to be profitable in the long term, you always need to trade in the direction of the current market trend.

To identify the Trend you will use the direction of the Cycle4x:

  • When the Cycle4x is Bullish, you only look for Long Positions.
  • When it’s Bearish, you only look for Short Positions.

2) Buy Low and Sell High: The CycleX.

Even though you already know the direction of the main trend, you can’t buy and sell at random levels.
In a Bearish Trend you must sell at the higher possible prince and, in a Bullish Trend, sell at the lower possible price.

To make sure you are “Buying low and Selling high” you use the CycleX to identify the Trend Retracements.

Trend Retracement occurs when the CycleX is moving in the opposite direction as the Cycle4X.

Here an example using the Premium Cyclical Indicator:

This condition allows you to open a position with the Lower Risk and Higher Risk:Reward.

The Entry Signal

At this point, once you know the direction of the main trend and that the price is retracing you are ready to look for an entry signal.

As I explain the Official Hurst Cycles Course, there are a lot of Entry Signals, for example, the Trendline Method.
To open a position in the Hurst Cycles Trading System:

  1. Identify Tops & Bottom of the cycles 4 times shorter than the CycleX.
  2. Draw a Trendline using the last two minima for short positions and the last two maxima for long positions.
  3. Open a position on the Breakout of the Trendline.

Standard Entry using the Hurst Cycles Battleplan:

A Real Example on the Eur/Usd Daily:

The indicators used in the screenshot are the Premium Indicators but you can always use the Moving averages or the Indicators of momentum as I explain in the article: "2 Useful tricks to identify the Hurst Cycles"

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