Ask Colin

I'm currently reading through the Gann section of E171 and I also went to the trading expo where I attended a seminar on cycles. I found this to be very interesting. It was presented by Trading Edge. He uses methods described by this book Merriman on Market Cycles - the Basic. Basically it was suggested that is was possible to predict the share price down to as little as 6 days with a 70% probability. The time frame has an error of one-sixth the cycle. Since you prepared the content for cycles I was curious if you think this is possible?

I'm currently reading through the Gann section of E171 and I also went to the trading expo where I attended a seminar on cycles. I found this to be very interesting. It was presented by Trading Edge. He uses methods described by this book Merriman on Market Cycles - the Basic. Basically it was suggested that is was possible to predict the share price down to as little as 6 days with a 70% probability. The time frame has an error of one-sixth the cycle. Since you prepared the content for cycles I was curious if you think this is possible?

I think the theory of cycles is interesting and it is important you are aware of it, which is why I included it in E171. However, like Elliott Wave, I think that a good basic idea about how markets work has been pushed too far when it gets to predicting markets. No one has ever been able to do it consistently. I think cycles exist - it is hard, for example to deny existence of the business cycle. However, my experience suggests that these cycles are not of consistent lengths and they vary enormously and without apparent reason. Therefore I do not feel that they are useful for trading.

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