On June 4th, 2022 we released a new improved version of the Cycle Trader Indicator and the Multi Timeframe version of the Cycle Trader Indicator for TradingView. The new version of the indicator should be capable of producing more accurate signals:
Please note on the chart shown above how “Sell 1” signals precisely nailed two tops on June 3rd and June 6th. In both cases those hypothetical sell signals were followed by strong declines.
However, we would not lie to you saying that those signals work in 100% of cases. Sometimes price just ignores those signals and continues its move. For example, look at the right chart of ES-mini. You can see that the indicator produced the “Buy 1” signal but price produced a miserable pullback. Bears pushed lower and the indicator produced another “Buy 2” signal. This time price immediately jumped 50 points! But then it dropped again where the indicator printed the “Buy 3” signal. And that signal almost nailed the final bottom of that move down and was followed by a big rally.
The original version of the Cycle Trader Indicator used to plot red lines (resistance levels) and green lines (support levels) when it detected that an up cycle topped, or down cycle bottomed. The new improved version of the indicator tries to produce more accurate signals to catch the exact points where a new down cycle starts off a fresh resistance or a new up cycle starts off a fresh cycle support.
Another new additional feature is the trending channel. That trending channel helps traders to correctly identify the correct directional bias. When the channel is green it is reasonable to go long on every newly printed cycle support. In contrast, when the channel is red, it is reasonable to favor short setups.
To change the color of the band and consequently change the directional bias it is not enough for price to simply break over the channel or break under the channel.
To confirm change in trend from the green bullish to the red bearish, the indicator waits for bears (i) to break under support of the trend channel, and (ii) produce a pullback to re-test the broken-support-turned-resistance and (iii) fail to reclaim the broken support.
To confirm change in trend from the red bearish to the green bullish, the indicator waits for bulls (i) to break over resistance of the channel, and (ii) produce a pullback to re-test the broken-resistance-turned-support and, finally, (iii) fail to reclaim the broken resistance-turned-support.
You can easily activate and e-activate those new tools in the menu of the Cycle Trader indicator:
To access the menu just right click any line plotted by the indicator.
If you have been using the previous version of the Cycle Trader Indicator and now you want to try those new features you should:
- Delete the Cycle Trader Indicator from your chart.
- Find the CAT Cycle Indicator under the tab Indicators / Invite Only and add it to your chart.
Hope those new features will help in your trading!
You can subscribe to that and other indicators here.
DISCLAIMER
The indicator provides trade set-ups and alerts that are for educational and hypothetical purposes only and shall not be considered trade recommendations.
Any signals or trading setups drawn by the indicator is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All users of the indicator must determine for themselves what specific investments to make or not make and are urged to consult with their own independent financial advisors with respect to any investment decision.
CastAway Trader LLC, the publisher of this indicator is not registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority.
Past results are not indicative of future profits.