This indicator was designed to remove trend from price and make it easier to identify cycles. Although this indicator has similarities to MACD. It is better used to identify the cycle of High and Lows based on the Statistical Data (Default is set to 25).
Yet another manner in which I see how to utilize this indicator. Please see self explanatory notations on the chart. First, we establish a Balance Point. Second, we marked Swing High and Low of Cycle Signal. Third, we trade (in this example) the best way possible of buying the dips of the Cycle histogram as they converge with our measured cycles. Take profit/ Exits would be discretionary upon user.
cooney_s
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In this illustration I highlight another two scenarios that are actionable using UCSGEARS' Cycle indicator. First scenario to mention would be the comment noted in white. This moment is highlighted because we have a Balance Point when Signal Line and Histogram are on Zero Line. This should always be noted on your price chart. I use the horizontal ray drawing tool to mark the closing of the bar as I know this is usually tested, creating a big divergence from the overall trend and price action bias. See the yellow dashed line and two yellow arrows located in the price panel. Secondly, we have another scenario to highlight which I did on just one occasion ,yet there are several. Using this Cycle indicator we can use the swing highs and lows of the Signal line to highlight breaches, for this I used sky blue. In this cherry picked example, we see how once the Signal line breached below the previous swing low, price follows through strongly. Target was determined to be closed where the Signal line breaches back up through the marked level, ending the down phase in this particular down cycle. This caught a pretty decent trend which resulted in a gain of nearly 5% over the course of 20 days. If you can visualize this indicator behaving similar to a Seismograph you will be able to better utilize its full potential.
IvanLabrie
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Nice example ;)
cooney_s
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Nice work UCSGEARS ! I prefer the HL2 source, I think it utilizes the meaning of the oscillator better, regression to a mean/median. Thanks for sharing.
UDAY_C_Santhakumar
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honestly, I was thinking about adding a drop down menu, just like the BB default indicator. I will see if it can be done.
cooney_s
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Here i offer how I would use the Cycles indicator, divergence bars everywhere if you know how to look for them. The focus on this image is just highlighting the Cycle bars which are counter trend. Reading from left to right we have one Sell, one Buy, one more Buy (short term) as this morphs into a Divergent Breakout and then the Divergent Breakout turns into a Bearish Breakout as the Cycle histogram breaches the low of the previous bearish Cycle low, very clear Sell signal. All based on the most import aspect of this indicator, the Signal line !!! Regression to the mean at its best. Very similar to the Awesome Oscillator with Signal but superior at pinpointing divergent price bars
UDAY_C_Santhakumar
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Nice Details, Good Job. Thanks, Keep it coming.
For new traders, I would like to point out that this is the Setup for Cycle Trading. Using a personal Trigger concept will be better to mitigate the risk. Trade Setup + Trigger ===> Trade, Is my principle.
TheYangGuizi
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Would be possible to colour the bars green/red depending on if they are above or below the zero line?