Cyclical resonance, as the name suggests, refers to different cycles pointing in the same direction, creating a trend that resonates. For instance, if the daily, hourly, and 5-minute charts all indicate a bullish trend, these three cycles will operate in the same direction, amplifying the force of the resonant direction and forming a stronger trend. At such times, the market will move more quickly, and the potential for price movement will be greater.

How do you find cyclical resonance?

There are two key points: the selection of cycles and the choice of technical indicators.

Let's start with the selection of cycles.

Step one: Determine the primary trading cycle. For example, if you mainly trade on a 1-hour trend, the 1-hour candlestick chart is the primary trading cycle.

Step two: Look up to a larger cycle. For instance, if you primarily trade on a 1-hour cycle, you could choose a larger daily cycle for resonance. When both the daily and hourly charts show the same direction, you would enter the market at the hourly level.

This is a dual-cycle resonance trading model. In practice, there are more complex models, such as a triple-cycle resonance model, which requires a third step. After establishing the primary and larger cycles, you also need to look down to a smaller cycle to form a triple-cycle resonance.

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For example, if you mainly trade on a 1-hour cycle, you would look up to the daily cycle and down to a smaller cycle, such as a 5-minute or 15-minute cycle, as the third resonance cycle. When the 15-minute, 1-hour, and daily cycles all show signals in the same direction, that's when you would enter the trade.

The role of the larger cycle is to lead the trend, the medium cycle is the main trading cycle, and the smaller cycle is typically the entry cycle. The saying "look big, trade small" is what this is all about.

Now, let's talk about the choice of technical indicators.Determining trends requires the use of technical indicators, which leads to a question: when there is a cycle resonance, should the same technical indicators be used across different cycles, or should different technical indicators be used?

Both approaches are viable. For instance, if you trade using moving averages, you can apply moving averages as the standard for judging trends across all time frames, regardless of their size. Alternatively, you could use moving averages in the primary cycle and MACD in the sub-cycles, or combine trend line breaks for mutual coordination.

The selection of indicators is based on a very simple criterion: they should be easy to use and something you can master proficiently.

However, once you have chosen a cycle, do not switch it arbitrarily. For example, if you use moving averages in the primary cycle, you must consistently use them to maintain the consistency of your trading.

Let me give an example of dual-cycle resonance.

I personally believe that triple-cycle resonance is relatively complex. Using dual-cycle analysis to look at the big picture while trading the small one can yield excellent trading results without being overly complicated, so I will use this as an example today.

Take the 15-minute chart as the primary trading cycle and the 1-hour chart as the larger cycle to establish the dominant direction. The 1-hour cycle uses trend lines as the standard for confirming the direction, while the 15-minute cycle, to enhance the stability of entry signals, uses the EMA60 moving average and trend line resonance as the basis for trading.

The chart shows the candlestick chart of spot gold. On the left side of the chart are the 1-hour candlesticks, which represent the larger cycle, and on the right side are the 15-minute candlesticks, which represent the primary trading cycle.

On the left side of the chart, the market broke below the uptrend line, and after November 1, the trend was judged to be bearish, which is the time period represented by the blue rectangle in the chart. During this period, only short positions were taken, and no long positions were made.

Looking at the 15-minute candlesticks on the right, when the market broke below both the trend line and the moving average, a bearish entry signal appeared on the 15-minute chart. The 15-minute bearish signal resonated with the bearish signal of the 1-hour cycle, and at this point, one would enter a short position.Here, the direction is determined on a large time scale, and when it resonates with the direction on a small time scale, an entry is made on the small time scale. There are two entry opportunities in the chart. After the first entry, the market simply oscillates downward and then reverses upward. After the second entry, the market then truly falls rapidly and significantly.