Time divergences. A new awesome concept!

The most important feature of the trading cycles is the use of THE TIME and they don’t only allow you to identify  market trends and support and resistance, but the Hurst cycles give you the possibility to directly time your trades and spot the Time divergences.

What I will explain you in this article is a new concept that you won’t find in any book or course.

The time divergences work exactly as any other momentum divergence and you can use them as:

  • Trade confirmation.
  • Entry & Exit signal.
  • Trend reversal and continuation.

Let’s see how to calculate and use them.

The Time calculation

To calculate the duration of the cycle you can count the periods from:

  1. The last minimum or maximum.
  2. The last time the Cycle Indicator turned to +1 or -1.

In the new CycleTiming Indicator shown in the next picture I’m using the method number 2.

time divergences 1

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The Time Divergences

Once you have calculated the duration of each leg of the cycle you can start to spot the time divergences.

Method 1: Top with Bottom.

As I explained in the previous article “How to time your trades“, due to the principles of the trading cycles:

  • When a cycle is bullish the leg up has to be longer than the leg down.
  • When a cycle is bearish the leg up has to be shorter than the leg down.

When this condition is not respected we have a time divergence and it suggests a trend reversal.

immagine

As weel as a trend reversal indicator, you can use it as a swing confirmation.

When the bearish movement in a bullish cycle lasts less than the leg up, there are high probabilities that the next swing will be bullish as well. The opposite for the bearish cycles.

immagine2

Method 2: Bottom with bottom & Top with top.

In this method you're using the time as a momentum indicator and use it to spot time divergences between 2 tops or bottoms.

  • Regular divergence:
    - New Minimum on the prince which is not confirmed on the indicator.
    - New Maximum on the price which is not confirmed on the indicator.
  • Inverse divergence:
    - Lower high on the price with a higher high on the indicator.
    - Higher low on the prince with lower low on the indicator.

time-divergences-2

As for all the trading signal they are probabilities. It means that you have to combine them with:

The NEW TIMING INDICATOR is NOW available!

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1 Comment

  • alain

    Reply Reply December 14, 2016

    it seems a very interesting concept. Thank you

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