Buying stocks, forex or futures during high volatility market cycles may lead to the opposite result of what you’re looking for. Stock market research indicates that the best time to buy stocks may be before a stock market trend, when you have rolling stocks, channeling stocks or other contraction price patterns.

So today we continue with our series on market cycles by covering expansion/contraction cycles.

As usual, the “retail” trader usually times these cycles perfectly wrong!

Learn about these market cycles and how to time them like a professional trader.

Although I use a stock market reference here (and the chart is one of the stock market) everything in the video can be applied to Forex, futures and commodities as well.

Enjoy the video and please post your comments/feedback below.

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A stock, Forex or futures chart only has 2 dimensions. Most traders and investors focus only only one: price. But along the bottom of every chart is another dimension: TIME. That axis is fully 50% of any chart’s equation and it measures market cycles.

Stock market cycles (as well as those of Forex, commodities, futures or any other market) are absolutely critical for those trading the markets because they provide the critical element of TIMING when to enter a trade.

A floor trader at the CME once told me that retailers (his word for amateur traders) are usually right, but at the wrong time.

W.D. Gann proposed that time was more important than price.

And yet as I talk to traders around the world, very few of them know anything about market cycles.

One of the most common laments I hear from amateur traders is that they took a position, quickly got stopped out, and then the market turned right around and went soaring in the direction of their original trade!

This happens because they don’t know how to TIME their trade.

When most people think of cycles, they think of up and down oscillations. And that is certainly one type of cycle. Even in a trend, the market moves up and down during its larger directional move.

However there are other types of cycles as well:

  • Contraction/expansion (cycles in volatility).
  • Order/chaos (cycles between high probability setups and low probability setups).
  • Fast/slow (cycles in how fast the market moves).
  • Coupling/uncoupling of sectors, industries and various market pairings.
  • Seasonal and calendar cycles that tend to occur around the same time of year.

… and there are probably many more.

Learning about these various types of cycles can give you a tremendous edge in trading because most traders don’t give them any attention. It can be your advantage that may turn you from an average day trader, swing trader or investor, into a profitable one.

The topic of cycles is a big one, so I decided to simply begin with this introductory article and then let you decide where we go from here.

Are you interested in learning more about these cycles? If so, put your requests (specifically which type of cycles you’d like to learn more about) in the comments section below and I’ll be happy to create blog posts/free videos in the future that cover those areas of most interest to you (majority wins!).

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This stock market has a lot of people pretty scared.

  • Is the current bear market unusual?
  • Are stocks doing something they’ve never done before?
  • How does the current stock market nose dive compare with bear markets of the past?

A little historical stock market research can reveal some very enlightening answers.

Will it give you comfort or make you more afraid?

Watch the video and decide for yourself, and then feel free to leave your comments below.

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I get a lot of the same questions from new traders, and they are very, very good ones.

So I decided to go ahead and post some resources for you “newbies” to get your answers. This way not only can you get the answers to the questions you’re asking me, but you’ll also have the resources to find answers to other questions that may come up in the future.

Disclosure: I recommend the resources below because I feel they are of great value, but I want you to know that I am a compensated affiliate with Amazon.com for all the books listed, INO TV and Trading Mind.

Here are some of the most common questions I receive from new traders:

1. MOVING AVERAGES: What are they and how are they calculated?

A great resource for these questions: Stockcharts.com Chart School

Go there and click the letter of the term you’re looking up, or type it into the “Search the Site” at the top left of the navigation bar.

2. ORDERS:

  • What is a market order?
  • What is a limit order?
  • What is a stop ?
  • What is a stop limit?

A great resource for these questions: Stockcharts.com Glossary

Go there and click the letter of the term you’re looking up, or type it into the “Search the Site” at the top left of the navigation bar.

3. WHAT IS A GOOD BOOK FOR BEGINNERS TO LEARN THE BASICS OF TECHNICAL ANALYSIS?

I’ve had good feedback from new traders on “Technical Analysis for Dummies.”

4. WHAT TRADING COURSES DO YOU RECOMMEND?

Of course I like my own courses the best! You can read all about them here: Top Dog Trading Courses.

Beyond that, INO TV is an incredible value. For a very, very low price you get access to video trading seminars from some of the biggest names in trading without having to pay for each course.

5. WHAT DO YOU RECOMMEND FOR CHARTING SOFTWARE, BROKERS, ETC.?

Visit my Recommended Resources page where I list all of these.

6. WHAT IS YOUR FAVORITE TRADING BOOK?

High Probability Trading” by Marcel Link

7. I NEED HELP WITH TRADING PSYCHOLOGY. WHAT DO YOU RECOMMEND?

“Trading Mind” hypnosis CD-ROM by Jake Bernstein

Trading in the Zone” by Mark Douglas

8. WHERE CAN I GET FREE DAILY CHARTS?

Stockcharts.com

9. WHAT ARE THE BEST TIME (CHART) INTERVALS FOR TRADING?I’ve addressed this in detail in 2 former posts in my blog. You can view them here:

What is the Best Interval for Day Trading?

and here:

What is the Best Interval for Day Trading? Part 2.

10.  WHAT ARE GOOD RESOURCES WHERE I LOOK UP WORDS AND TERMS ABOUT THE MARKETS TO LEARN MORE?

ChartSchool

Investopedia

InvestorWords

I hope you find these resources helpful.

Happy Trades!

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