What is Cycle Trading?
Cycle trading is a way that traders use to find support and resistance of a stock and getting when the stock hit a cycle low and get out when the stock hit a cycle high.
Cycle Trading Pattern
The Cycle Trading Pattern looks like a Sin wave. When the stock market or an individual stock is trading in this range, it is what we called a stock is trading in a cycle. It fails to break the low of the cycle low and fails to break the high of the cycle. Sometimes a stock may take years to be trading in cycles. When you recognize this pattern, it is a very profitable trading pattern in the long term.
4 Phases of the Cycle
There are general 4 phases of the cycle, Business Phase, Recession Phase, Depression Phase, Recovery Phase. There are short term and long term cycles of a stock or the general economy. If you get in on the Business Phase or the Recovery Phase, it could be very profitable.
Cycle Trading Chart
Here’s the chart for AMAT which was trading in cycle in the past 2 years with a cycle low of 10.0 and a cycle high of 16.5
