The Principle of Harmonicity

Wavelengths of Cycles are Related by Specific Small Integer Values

The principle of harmonicity is an important aspect of Hurst Cycles to be aware of, perhaps only secondary to synchronicity although in practice commonality is one of the most useful principles when actually trading.

Neighbouring degrees of cycle are related to one another by specific ratios, usually 2:1 and 3:1 but can also be a 5:1 ratio at the intraday level, according to the model created by David Hickson. This principle holds up very well throughout history and indeed since the time I started using Hurst to trade with. Here are some examples from the nominal model:

  • The 40 day cycle¬† is in a 2:1 ratio with the 80 day cycle.
  • The 80 day cycle is in a 2:1 ratio with the 20 week cycle.
  • The 20 week cycle is in a 2:1 ratio with the 40 week cycle.
  • The 18 month cycle is a 3:1 ratio with the 54 month (4.5 yr) cycle.

Crucially for those trading using the FLD trading strategy, as I do, the neighbouring cycles either a degree above or below to the cycle you are trading must be in a 2:1 ratio for the interactions to work consistently. So for the case of the 80 day, the 20 week one degree above is 1:2 with the 80 day cycle and two 40 day cycles a degree below are at a 2:1 ratio.

This also means you can apply the FLD trading interactions to lower and higher degree cycles, as long as they have neighbouring 2:1 ratio relationships. For example if you are into intraday trading you can use the 1 hour cycle and the 15 minute FLD as the action signal. This works fairly well but be aware that the cycle one degree higher than the 1 hour is the 160 minute – a 3:1 ratio.

The following webinar explains the harmonicity principle in detail prior to a look at the EURUSD forex pair as an example:

 

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