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Decoding The Hidden Market Rhythm - Part 1: Dynamic Cycles: A Dynamic Approach To Identify And Trade Cycles That Influence Financial Markets (WhenToTrade) (Volume 1) Paperback – August 17, 2017
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About the Author
Lars von Thienen holds a degree in engineering and management. He worked as a programmer, scientist, trader and business consultant for over 25 years. He has extensive experience in combining technical engineering know-how with economics and business-related issues.
Top customer reviews
the software developed by the author. There is no code in the book , just examples from the software.
Let me start by debunking some myths. "Dynamic" cycles means that the spectral analysis is undertaken with each new bar of data so that the cycle analysis is optimised with the addition of each new bar. That is the breakthrough - in one sentence.
Anyone who is familiar with Dewey knows that the Fourier engine can be licensed from the Foundation for the study of cycles. The dynamic cycle plot which can be seen in youtube videos shows the DC (dominant cycle) and then the variation from the displaced moving average (A Hurst concept). This is easy to spot by eye. And anyone who has read Connie Brown's books knows that the optimum period for for an oscillator is half the dominant cycle. So it would be easy to make your own software with similar functionality and an Indian firm could code these concepts for very little outlay. In fact, most Fourier analyses on a daily time frame chart can produce similar results - mine certainly does and it is coded for my native platform. It is also "dynamic" in that it updates with each new bar.
As for the software, it is full of bugs with frequent error messages. It does not download data on restart making saved workspaces useless. The author went so far as to tell me that working with incomplete data is by design. So cycle analysis with an incomplete dataset could be a "feature"?
What the casual visitor to the website cannot see is the "Support" forum which is only unlocked after your pay for the software. In there, you will find user requests for even the most basic functionalities being ignored. There are also people who purchased the software and had to wait 2 weeks for an activation code.
So in effect, with the software purchase you are paying for the privilege of beta testing the software.
The main interest for the active trader is intraday. And here is where the cycles fail frequently and miserably. Price will often do the opposite of what the cycles are suggesting and the cycles will correct after the fact when the fourier has had the chance to catch up to the price action. So to trade with the DC, you will frequently lose money and then you will be presented with a different DC after your stop has been taken out. However, you will not find screenshots of this phenomenon since the disclaimer for the software forbids publication of screenshots under threat of legal action. Got something to hide?
The problem is that you only realise how weak the methodology is after you have purchased the software and by then it is a sunk cost. And once you made the purchase and realise that the software doesn't even download data to fill in the time between your computer being turned off to being turned back on, your mistake sinks in. Of course, the sale has been made and so the vendor has little incentive to listen to the support forum.
All in all, 50-50. Really not that different to other trading methodologies available to the public. You could probably do far better trading a MACD divergence with price trend-line break for confirmation. But of course, everyone wants a methodology that makes them feel smart. Best advice - invent your own methods.
Lars presents an approach of calculating market cycles, not just by pure Fourier transformations (which I tried myself before with mediocre success), but with self-adapting cycles aligning to changes in markets, and thus reflecting their dynamic behaviour.
Lars presents this (as far as I know unique) approach in a very detailed manner in his book, so that really EVERYONE without prior knowledge or a PhD in maths is able to follow his principles. Lars must have in-depth knowledge of mathematics, statistics and digital signalling processing. I consider myself to also be firm in maths and statistics, but was never able to lift cycle analysis to the level Lars achieved.
A minor drawback that should be mentioned is that his analyses needed a purchase of his software package (at least up to some months ago). I never regretted this purchase. But a few months ago Lars introduced an API which makes cycle analyses in the cloud available to everyone. With this API I was able to create an Excel spreadsheet automatically determining major cycles in the markets of my interest, making updated analyses available within seconds. THANKS LARS for saving tons of work with this great feature!
I never had the pleasure to meet Lars in person, but we exchange emails from time to time, and I appreciate his always friendly and helpful attitude.
It might be too much to say that purchasing his extraordinary book and his software license changed my life, but as I said I never regretted it and would purchase it anytime again.
5 stars for an excellent, outstanding work!
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