Mastering Hurst Cycle Analysis: A modern treatment of Hurst’s original system of financial market analysis

314 Pages·2011·21.85 MB·English

by  Christopher Grafton

MASTERING
HURST CYCLE
ANALYSIS

A MODERN TREATMENT OF
HURST'S ORIGINAL SYSTEM OF
MARKET ANALYSIS

CHRISTOPHER GRAFTON
Table of Contents

Visualising Period and Ampklude
Ilow Cycles Combine

Proportivs of Markel Cycles
Conclusion

‘Trend and Trendlines

Concepl of Trendiines,
‘Trend Direction

ud Slrenghy
The Real Nature of Trend

The Key Role Played by VILs

2. BASIC TOOLS II: DISPLACED CYCLES —
THE FLD

Introduction

Properties of the FLD

Plotting the FLD

Applying FLDs

FLD Combinations
4. ISOLATING MARKET CYCLES

Scanning Charts
Enloring the Trade,
Short Selling

zz. MANAGING OPEN POSITIONS
ah
Case Study — JPMorgan Chase 2002/2003
8. RSI AND ELLIOTT WAVE

ah
RSland Elliott Wave ~ the Basics

Case Sludy [: Gold, Novernber 2008,

Case Study II: Duro/USD, January 2010,

Appendix 1: Elliot: Wave Patterns
Appendix 2: ELD Code
Appendix 3: Inverse Moving Average Code.
Appendix a: Cycle Envelope Code

Appendix g: Dinnonds Grid and Numbers
Appendix 6: Diamond Placement Code
Appendix 7: Diserole Kauri form Code.
Appendix 8: Volatility Index code
Recommended further reading,

‘The Sentient Trader
Publishing details
HARRIMAN HOUSE LTD
gAPonns Road

Petersfield

Tampshire

GU32 EW

GREAT RRITAIN

Tel: [phone]

Tax: [phone]

Email: [email protected]
‘Wobnite: www harriman honse.com

Tirst published in Great Dritain in 2011
Copyright| © Hecsinan House Lid

The right of Christopher Grafton to be identified as the anthor
hhas been asseried in accordance with the Copyright, Design and
Patents Act 1988.

ISBN: y78 0 85719 198 4

British Library Cataloguing in Publication Date
ACIP calslogue cecozd for this boo’ ean be ublained from the
British Library.

All rights reserved; no part of this publication may be
reproduced, stored in a retrieval system, or ransmitted in any
form or by any means, electzonic, mechanical, photocopying.
recording, or otherwise without the prior written permission of
‘the Publisher. This book may not be lent, zesold, hired out or
otherwise disposed of by way of trade in any form of binding or
cover other than that in which it is published without the prior
‘written conseat of the Publisher.

Nu respousibilily for lose vevasioued lo uny person or corporate
Vody cling or refraining lo acl asa resull of reuding snaterial in
this buok can be accepled by the Publisher, by Ue Author, or by
the employer of the Anthor.

Designated srademarks and brands are the property of their
respective owners.
Nana korobi, ya oki

“Fall down seven times — get up eight.”
Praise for Mastering Ilurst Cycle Analysis
“This book is highly-recommended for any marker analyst or

trader whe wishes to add eycles to (heir unulylical toolbox.
This fsa clear and concise intraduction.”

Bill Surubbi, Fund Manager,
TG, Vienna

Yyelee Research Joveslments

“Cycles are one of the most underutilised, and yet most
rewarding, sources of information available to an analyst or
‘inwestor. [fit is posstble to anticipate a reversal, and track it in
real time, then eager investors should want to know about tt
Until relatively recently, cycles have not been properly
understood, so there has been « dearth of practical knowledge.
This gap is now being filled by dedicated researchers such as
Chris Grafton. His book brings together the ideas of one of the
pioneers of cycle analysis ~ the engineer. J.M. Hurst — and
presents them in an easily understandable and very useable
form. Once mastered, the techniques explored in the book
‘should be a source of significantly enhanced market
understanding and very profitable investment.”

~Tony Plummer, Author, Forecasting Financial Markers,
Director, Ielmsman Economics Ltd

“1 really like this book. It takes the excellent original idea of
Hurst and brings i right up-to-date in tie modern computer
era, I expluins cycles and harmonies und shows how wo
construct Valid Trend Lines und Lines of Fuiure Demareation,
Ud does not pretend that this subject is eusy, but does explain il
with very clear charts and writing. Tie work shows the
relationship to BDiott waves and RSI oscillations. There are
sume clear worked exarmples and ideus of iow iv pul on and
manage a trade, Must investors will Jind i a useful uddition to
their knaxnledge. Woll donc Chris Grafton.”

- Robin Griffiths, Technical Strategist, Cazenove Capilel
Management
“Pheough clear, straightforward explanations of the twols and
up-o-date market illustrations, Grafton mukes Hurst cycle
unulysis accessible le today’s trader. Readers gain not only a
thorough understanding of cycles but alse the skills to begin
implementing cycle analysis hermediatcly.”

~ Julie Dadilquist, PL.D., CMY, Bdilor of the Journal of
‘Technical Analysis aad co-aultior of Technical Analysis: The
Carmplote Resurec fam Financial Market Technicians

“IM. Hurst's Cyclie Principles are perhaps the most powerful
yet misunderstood concepts about the workings of financial
markets in the history of financial trading. Published in the
1970s, Hurst's work has survived into the 21st century because
it ts 50 powerful and effective, but the application of his
principles and the practice of his trading methodology have
been shrouded in a cloak of arcane mystery. Christopher
Grafton has done a great service to the 2ist century trader by
thoroughly presenting Hurst’s work in a format that replaces

the pencil, eraser and chart pad with a computer. Armed with
the tools that Grafton includes in the book (and an
understanding of how to apply them) the reader will be well
placed ta start honing their analytical skills and putting this
‘powerful theory to profitable use.”

— David Hickson, creator of Sentient Trader — Hurst Trading
System (wew.sentienttrader.com)
About the author

(Christopher Grafton is currently Director, Principal Analyst and
Syslems Developer al Veclisme Lid., an independent markel
sulysis firm focusing on Japanese equilies willta global snacze
overlay, Lused in Bnglund. Previously, ie has held positions om
the sell side ul several snvestiment banks in London and Tokyo
and ale worked as en anelyst and Lader for a London based.
Ledge [und specialising in Japanese equilies. Christopher
speuks fluent Japanese, i= a member of the Markel ‘Techuicians
Ascocialion, is a succesful sysleins designer, progruamer and.
trader, and holds the Chartered Market Technician designation
About this eBook

Whilst every effort has been made to ensure an optimal reading
experience, eBuok page layoul can be alfecied by the user's
eReader ad puye gumbering ay alvo vary. ‘Teal size, and in
some cases fonl, can be adjusled. A bookmark feelure i=
invriln’le on some oRonders.

Avery useful feulure of eBouks is Uhal the user can seareh for the
couleal they need, rather then being provided wilh an index.
Use the seurch fuselion on your eReuder or in your ebook
sattinre to search this cRook for words ar phrases

Plewse Le aware hal Uhis buok cunlins colour prive charts Uhl
suol display oplimally on a greyseals portable eBook reader
in Uhese cases you will achieve a beller ceading experience by
viewing Uke buok in software for PC or Mac thal allows a colour
digpley.