Macrocycle analysis

Macrocycle analysis is an essential part of trading analysis and system development.

An accurate gauging of market relationships and a most likely scenario of market direction allows for adjusting:

Trade instrument selection

Trade time frame selection

Trade frequency adjustments

Selection of stackable edges to exploit low-risk entry and exit points

Or, in short, the whole toolbox on when and what to trade with what edge parameters.

For the foreseeable future, we expect more extended buy-and-hold strategies to be less fruitful and, instead, a market environment that trades in a stairstep fashion more conducive to a higher trade frequency and lower time frames.

A market aligning for selective traders who pick their battles and do not plot multiyear rallies.

We still believe that specific markets will extend themselves in a directional sense after a multiyear "sideways phase." Nevertheless, even then, the "volatility to trend steepness ratio" can make it psychologically difficult for the long-term approach due to larger than usual retracements.

With principles in place that serve us to trade all market vehicles, we aim to isolate conducive instruments for trading for specific market cycles. We will, as such, add leveraged ETFs to our portfolio for execution cost reduction, risk reduction, liquidity reasons, and the prevailing belief that these instruments will suit us well for the expected upcoming market cycle.