Closing Trading Cycles: A Strategy to Anticipate Market Movements
In the world of trading, understanding and anticipating market movements is essential to making informed and profitable decisions. One of the strategies that traders use for this purpose is the analysis of cycle closures. But what exactly is a cycle in the context of trading and how can it help us improve our trading?
What is a Trading Cycle?
A cycle, in trading terms, refers to a phase in which the price of an asset shows a repetitive pattern. This pattern can be identified and used to predict future price movements. A complete cycle includes both bullish and bearish movements, and eventually returns to the starting point.
Symmetrical Cycle Closing Strategy
The symmetrical cycle closing strategy is based on identifying these patterns and anticipating the next price movement. Once a cycle close is identified, traders can focus on that zone and apply technical analysis tools, such as Fibonacci levels, to determine potential entry and exit points.
Steps to Apply the Strategy
Cycle Identification: Observe the graph and wait for a complete cycle to form.
Fibonacci Plot: Once the cycle closure is identified, plot a Fibonacci from the lowest point to the closing point.
Waiting for Breakout: Look for the price to break the 0 Fibonacci line, which indicates the search for stops by other operators.
Entry into the Zone: After the breakout, wait for the price to re-enter the zone below the 0 Fibonacci line to take a short position.
Risk Management: Place stops above the breakout point and set profit targets at key Fibonacci levels.
Final Considerations
It is important to remember that no strategy is foolproof and that trading always carries risks.
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