By Johannes Brilleman
Johannes is a graduate from Bradford University, School of Management and after a career of 15 years as Project Manager decided to start his own life as a Financial Day trader. Originally from the Netherlands, during his career he has been living in many different countries, including long stops in Singapore and in recent years the Russian Federation. His main interest is exploring the reason behind the cyclic nature of time. Johannes can be contacted at firstname.lastname@example.org
Part 1: Cyclic Time on the Financial Markets
often said that history repeats itself. Why is it then, that we
'know' this, but, do not 'act upon it' ? In fact, what really happens
is, that we recognise cyclic time only after certain events have
taken place and we compare those events to something that has
happened in the past. We do not know the reasons for these cycles,
and frankly, we tend not to bother with understanding them.
of 'drive' to find out whether time truly is cyclic and why, changes
as soon as you start looking into Financial Trading. As soon as you
realise that your bread and butter depends on understanding why the
price of a company's stock goes up or down, you start to get
interested in understanding ANY reason behind these price movements.
Any type of forecasting that has a higher rate of success than 50%,
is directly related to the income you have.
A typical Financial chart, showing the Euro — US Dollar exchange rate from 2010 until current, every green or red bar represents one week.
longer you look at the typical financial charts that track the price
movements of stocks, commodities, currency exchange rates, etc. The
more you start seeing repetitions of patterns. This phenomenon is
pretty widely known in the financial world, there are traders that
use techniques of Fibonacci numbers, Gartley price patterns, Elliot
Waves, Japanese Candle Sticks.... the list goes on and on. The idea
behind all these methods is: when a certain pattern appears, there is
a high chance of a certain movement of price directly afterwards. And
therefore, you base your trading decision accordingly.
'Pattern-trading' were to work to a statistically significant level,
then all traders would be rich and everybody else would be trading
too. This is not the case, however.
patterns exist, and often have a favourable outcome to them. But,
sometimes the outcome is not the one that is expected and it then
depends on the trading skills of the trader to keep his losses to a
interesting to note at this point that most of the people who have
studied these patterns of the financial markets and wrote books about
them, rarely go into the subject of: 'Why'. Why do these patterns
appear? It seems logical that if you understand why a pattern appears
that you also understand what the outcome of the pattern will be.
were to ask a trader to name one historic figure that attempted to
explain why these patterns appear on the charts, most likely you will
receive the answer: 'W.D. Gann',
(http://en.wikipedia.org/wiki/W._D._Gann). His name is probably as
widely used in the trading world as Fibonacci's. Gann was a trader
from the early 1900's and wrote many books on his esoteric approach
to forecasting the markets. His books however, are written in such a
way that many people since have been breaking their heads on what it
actually was that he was communicating. There are as many
interpretations of his works as there are traders, and people who
study his works divide themselves typically between: 'A student of
Gann', and 'I have finally cracked Gann's secrets!'. Both categories
of people refuse to explain the 'Why' of cyclic time.
addition to Gann, the other person often cited with the discovery of
cyclic time within the markets is 'N.D. Kondratiev',
(http://en.wikipedia.org/wiki/Nikolai_Kondratiev), also giving no
insights into the question of 'Why'.
other words: if you realise that understanding price patterns
correlates to your income, and when you realise that nobody out there
is satisfactory explaining why these patterns occur, you are pretty
much left to your own research. Or, you drop the topic, of course.
I set out
to do my own research. And I want to share my findings with you. Not
from the perspective of trading the financial markets, however. What
I want to do is create an awareness of cyclic time, and why, I
believe, these cycles are occurring.
all, I will continue this writing with the help of 'financial
trading'. I believe that the two-dimensional charts are like a hole
in a big fence. Through these charts it is possible to see the
workings of time in a very precise way.
that is obviously clear from the works of W.D. Gann, is that he used
astrology. Many of the drawings that he made in his works contain
astrological symbols of planets and zodiac signs. I would love to
include a picture in this article to demonstrate my point, but I am a
bit wary of copyrights. The best thing to do is search the web for
his famous 'Soya beans' chart from 1948. It clearly shows a line
So I had
a starting point for my research. And anyone who has a bit of
knowledge of Hindu Astrology will know that the relationship between
the position of planets and the perceived value of commodities is
being tracked already for many thousands of years. Why did we forget
this? It weren't just the ancient Hindus, the Babylonians were making
such observations too. You can look into a translation of the
Babylonian work 'Enuma Anu Enlil', to find such passages as:
"If on the fifteenth or fourteenth of Nisannu (March/April) five disks come up: business will be reduced.
If with it a cloud bank lies on the right of the sun: the trade in barley and straw will expand.
Watch the opposition of the Pleiades and the moon, and all this will give you the proper answer."
these hints of Astrology being behind the movement of prices, and
with a hungry stomach in the background, I started to look for
ANYTHING that I could find on this topic.