Combined Effects
Chart/Video: Combined Effects: Analysis Area (left – Point A and B), Prediction Area (right, Point C and D) – Deviation
In practice, both effects occur in parallel and change continuously around the core dominant parameters. The deviation in the projection area at points C and D shows that just following the grey static theoretical cycle will rapidly become worthless compared to the red real-world “dynamic”cycle. However, trading takes place at the right side of the chart. Therefore it is important to follow the dynamic nature instead of just “plotting” theoretical cycles on the trading chart.
These two effects occur in a continuous manner. Although the alignment in the past (points A and B) appear acceptable between the static and dynamic cycle, the deviation in the projection area (points C and D) is so high that trading the static cycle will lead to failure.
