Left and Right Translation
posted under
Philosophy of Technical Analysis
by ceecabolos
The concept of translation may very well be the most useful aspect of cycle analysis. Left and right translation refers to the
shifting of the cycle peaks either to the left or the right of the ideal cycle midpoint. For example, a 20 day trading cycle is measured from low to low. The ideal peak should occur 10 days into the cycle, or at the halfway point. That would allow for a 10 day advance followed by a 10 day decline. Ideal cycle peaks, however, rarely occur. Most variations in cycles occur at the peaks (or crests) and not at the troughs. That's why cycle troughs are considered more reliable and are used to measure cycle lengths.The cycle crests act differently depending on the trend of the next longer cycle. If the trend is up, the cycle crest shifts to the right of the ideal midpoint, causing right translation. If the longer trend is down, the cycle crest shifts to the left of the midpoint, causing left translation. Therefore, right translation is bullish and left translation is bearish. Stop to think about it. All we're saying here is that in a bull trend, prices will spend more time going up than down. In a bear trend, prices spend more time going down than up. Isn't that the basic definition of a trend? Only, in this case, we're talking about time instead of price.
shifting of the cycle peaks either to the left or the right of the ideal cycle midpoint. For example, a 20 day trading cycle is measured from low to low. The ideal peak should occur 10 days into the cycle, or at the halfway point. That would allow for a 10 day advance followed by a 10 day decline. Ideal cycle peaks, however, rarely occur. Most variations in cycles occur at the peaks (or crests) and not at the troughs. That's why cycle troughs are considered more reliable and are used to measure cycle lengths.The cycle crests act differently depending on the trend of the next longer cycle. If the trend is up, the cycle crest shifts to the right of the ideal midpoint, causing right translation. If the longer trend is down, the cycle crest shifts to the left of the midpoint, causing left translation. Therefore, right translation is bullish and left translation is bearish. Stop to think about it. All we're saying here is that in a bull trend, prices will spend more time going up than down. In a bear trend, prices spend more time going down than up. Isn't that the basic definition of a trend? Only, in this case, we're talking about time instead of price.
Comment Form under post in blogger/blogspot