Customer Reviews

Channels and Cycles: A Tribute to J. M. Hurst

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3 star:		(1)
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1 star:		(2)

 

 

I am in the middle of reading both JM Hurst's original work on market cycles, as well as Brian Millard's modern treatment of cycle analysis. I've finished this one today.

This book is for the technician or trader who wishes to think for himself, and not rely on over-used, and often misapplied mathematical techniques.

Millard instructs you on how to use mathematical tools to extract cycles from stock price data, predict price and time zones, and determine the optimum time period to trade in.

Through simple logic, Millard demonstrates the optimum time period to trade in is between 50 and 100 days. If you are a diehard daytrading scapler, you probably won't like the conclusions he comes to in this book.

Through the simple use of moving averages and envelope channels, you can learn to pick out the low risk points to place directional trades. I've experimented with the techniques for a few months now, and they are very useful.

What is fascinating, is that the trading rules developed from cycles often match up very well with classical chart pattern trading rules.

The author does an excellent job of explaining the mathematical properties of moving averages, and how the use of moving averages in cycle analysis differs from their use in conventional trend following systems.

Some reservations about the techniques: 1. Cycle analysis uses arithmatic scaling for measuring the magnitued of cycles. This strikes me as invalid on time frames greater than weekly, due to the logarithmic price changes over long periods of time.

Point and figure chartists have similar problems--dealing with changes in price level. It is going to be very hard to draw valid channels on some large cap tech stock that declined from 100 to 10 during the bear market. Having said that, for shorter time periods, these methods are fine, and the techniques to measure wavelength (time targets) are still valid, even on monthly data.

2. The author makes absolutely no use of volume in the analysis. I suspect incorporating volume into the analysis of cycles would improve the results.

3. The author makes it appear that stock price data is just like any other data. With this, I disagree. There is a psychological element that is missing from this type of analysis. Cycles are not the complete answer to trading, but they are a very good start.

This "tribute" to J.M. Hurst is a very difficult read at best. He took the work of Hurst and made it very complex and in my opinion useless in real life trading. The publisher says that this book "clarifies" and "updates" Hurst's original book. Hardly.

I totally disagree with the author's assertion that the optimal trading period is 50 - 100 days. Hurst's main premise was the shorter the cycle the faster profits would accumulate by rolling into other opportunities as soon as the trade was closed, compounding the gains (pg 24).

Hurst's "The Profit Magic of Stock Transaction Timing" is a classic text for anyone interested in cycles or swing trading. Buy that book instead.

This is just a rehash of J.M. Hurst's excellent work, "The Profit Magic of Stock Transaction Timing". I fount the original easier to understand and liked Hurst's plain-talking style better. If Millard added anything original, I did not find it.

I can't beleive the "other review" I just read. I was flabergasted! This book is one of the best of it's type that I have read. I am not the expert and still consider myself a "student", but I've been succesfully trading commodities for over a year and have amassed a small library of books of which this is the best. Contrary to the other review I just read, I found this book to be very easy to read and exceptionally stimulating.

Mr. Millard has taken what J.M. Hurst started and developed it to new levels. In this book he has expanded & built upon the principles put forth by J.M. Hurst. He has since built upon this foundation with his own work on the subject of cycle & channel analysis.

This book contains a wealth of information which can be utilized right away. Millard shows how to use simple paper & pencil methods and also implimentation of numerical methods which are quite sophisticated.

My entire trading methodology has been modified because of this book. To me, Milllards writing is clear, concise, and right to the point. I am not a math wiz and I did have to re-read one section of one chapter a few times for clarity, but this was not difficult once given a little thought, which is well worth the time and effort.

Millard goes into a great deal of detail with regard to trading and shorter cycles. He quite clearly demonstrates that shorter duration trades are more profitable, hence, his comments and conclusions are in harmony and agreement with J.M. Hurst and his book "Profit Magic od Stock Transaction Timing" (also a great book). In fact, Millard puts forth a strong and compelling case for his recommended short duration trades of between 50 - 100 days. As far as I can tell, J.M. Hurst's short duration trades were in the range of 36 - 42 days. Both seem to agree completely if you ask me.

If you are a fan of cycles you will really like this book. You will find valuable information from a notable British investment writer whos has published many other works (and software) as well. Do search under "Brian Millard" and see for yourself.

A great book. By all means - get it. Get J.M. Hurst's book too. They are a great combination!

Mark

Written for statisticians, not for the average investor who is not into researching the mathematical basis for the ideas sketched in this book. The presented ideas and concepts seem to be restricted in application to certain cases conformable to cyclical and amplitudinal stock price behavior. The concept of projecting the application into the future as a price determinate is not only abstruse but arcane. Would make a good basis for the development of a computerized trading system now that number crunching unburdens the concept.