The Principle of Synchronicity

Why are Cycle Troughs Synchronised?

Hurst’s seminal book ‘Profit Magic for Stock Transaction Timing’ set out several principles on which this type of market analysis is based. One of the most important is the idea of synchronised troughs. Put simply this means that when a trough of large magnitude occurs in equity markets, other lower degree cycles also make their lows. This is why stock markets generally exhibit sharp bottoms and rounded tops. For example an 80 day low also implies a low of 40, 20 and 10 day magnitude has occured. Once the savvy hurst trader has phased the preceding cycle well he can proceed to use this principle to gain highly probable entries based on VTL and FLD crosses.

The following webinar, recently broadcast by David Hickson, explores the principle of synchronicity in great detail and I urge you to watch with interest. Of note is the alternative phasing using synchronised peaks and discussion of whether both troughs AND peak synchronisation should be used. In my experience the vast majority of instruments, equities, commodities and forex can be successfully traded using a trough based phasing analysis.

Cycles and Music

As an interesting aside I find the application of sine waves to explain the summation of several specific cycles is analogous to fundamental and harmonic tones in the musical sphere. The timbre of a particular instrument is defined by its fundamental tone plus its harmonic frequencies, all of which usually follow a simple harmonic ratio in relation to the fundamental tone. For example the purest tone that can be produced on a modern synthesiser is a simple sine wave. Add more and more sine waves and more complex timbres are produced, such as a bell or brass like effect. This subject is related to Hurst’s principle of harmonicity aswell as synchronicity.

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Fundamental and harmonic tones plus equivalent musical intervals in the common western scale

What is even more fascinating is that in music harmonic tones that are added to the fundamental tone in a simple harmonic ratio produce consonant, or tonal, results, pleasing to the ear and the basis for the western scale of major key music. Harmonic tones added to the fundamental tone in a random orĀ  more complex ratio produce dissonant or atonal sounds – like white noise or timbres that sound ‘unpleasant’ to the ear. Minor scales and the more exotic scales of music common in Eastern cultures typically contain these ratios. Those looking for further detail on this subject should look at ‘Pythagorian Tuning’ as a starting point.

In this way perhaps we can say Hurst’s cyclic principles uncover the ‘music of the market’ and that music, due to its simple harmonic ratios governing the nominal model, is usually consonant!

 

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