As a trader who uses technical analysis, I found Mastering Hurst Cycle Analysis, by Christopher Grafton a very interesting read. www.tradersdaytrading.com visitors and regular readers of Kenny?s Technical Analysis will already be well aware of how much importance I place on my time cycles analysis of the markets, and exactly how profitable it can be.
Hurst?s methodology for time cycles analysis is an extremely useful part of that analysis, and I suggest that this manual should make its way into every technical analysts library.
Grafton?s work updates and expands upon the work of J.M. Hurst, an aerospace engineer who, in the 1970's developed a trading system based upon applying his knowledge of cycles to the price movements within the stock market.
Hurst's system of applying a series of time cycles to the fluctuations of the stock market includes some very simple methods that can help the analyst to narrow down some extremely high quality trading opportunities, and these are very clearly explained in some detail in Mastering Hurst Cycle Analysis.
Chris begins by giving a detailed introduction as to what time cycles are, and exactly how they are formed. This ensures that even if the reader is a complete novice to time series analysis, they are able to be guided step by step through the process of performing a complete Hurst cycles analysis of any financial market. In his introduction, he writes ?The purpose of this book is to get you to the stage where you can perform cyclic analysis on any freely traded financial instrument quickly and effectively on your own system?.
At every stage of the process, the explanation of Hurst?s methodology is enhanced by the addition of some very useful illustrations that give readers that all important visual element that is required to fully and quickly understand exactly how the methodology should be applied in practice.
Although Chris makes it clear from the start that the practical application of Hurst time series analysis is by no means an easy process (Show me a successful trading system that is!), with a little bit of perseverance and by following the few simple methods laid out in the book, readers can soon become quite adept at performing a Hurst Cycles Analysis in the markets that are of interest to them.
All in all, I believe that anyone interested in technical analysis will find it very useful and excellent value for money, as they begin to gain sufficient knowledge to confidently use Hurst Cycle Analysis methods in their technical analysis of the markets. And more importantly, see the results in the bottom line in their trading account.
