14. Bringing it All Together
Although the primary predictive tool is the cycle sum, we saw in the last chapter that it is dangerous to rely on just this when taking a trading decision. There is a logical sequence that must be followed if consistent success is to be obtained.
Four Key Steps
If you have a software package that will calculate cycle sums and channels, the steps are:
- Get the cycle sum, as discussed in Chapter 13, and make sure that the cycle sum is as close as possible in shape to the comparator nine-day centred average. As we mentioned previously, only about 10% of the securities in any one market will satisfy this test.
- If the cycle sum agrees with the comparator, construct the 51-day and 101-day channels. Analyse these ...