4-Year Cycles [jpkxyz]Overview of the Script
I wanted to write a script that encompasses the wide-spread macro fund manager investment thesis: "Crypto is simply and expression of macro." A thesis pioneered by the likes of Raoul Pal (EXPAAM) , Andreesen Horowitz (A16Z) , Joe McCann (ASYMETRIC) , Bob Loukas and many more.
Cycle Theory Background:
The 2007-2008 financial crisis transformed central bank monetary policy by introducing:
- Quantitative Easing (QE): Creating money to buy assets and inject liquidity
- Coordinated global monetary interventions
Proactive 4-year economic cycles characterised by:
- Expansionary periods (low rates, money creation)
- Followed by contraction/normalisation
Central banks now deliberately manipulate liquidity, interest rates, and asset prices to control economic cycles, using monetary policy as a precision tool rather than a blunt instrument.
Cycle Characteristics (based on historical cycles):
- A cycle has 4 seasons (Spring, Summer, Fall, Winter)
- Each season with a cycle lasts 365 days
- The Cycle Low happens towards the beginning of the Spring Season of each new cycle
- This is followed by a run up throughout the Spring and Summer Season
- The Cycle High happens towards the end of the Fall Season
- The Winter season is characterised by price corrections until establishing a new floor in the Spring of the next cycle
Key Functionalities
1. Cycle Tracking
- Divides market history into 4-year cycles (Spring, Summer, Fall, Winter)
- Starts tracking cycles from 2011 (first cycle after the 2007 crisis cycle)
- Identifies and marks cycle boundaries
2. Visualization
- Colors background based on current cycle season
- Draws lines connecting:
- Cycle highs and lows
- Inter-cycle price movements
- Adds labels showing:
- Percentage gains/losses between cycles
- Number of days between significant points
3. Customization Options
- Allows users to customize:
- Colors for each season
- Line and label colors
- Label size
- Background opacity
Detailed Mechanism
Cycle Identification
- Uses a modulo calculation to determine the current season in the 4-year cycle
- Preset boundary years include 2015, 2019, 2023, 2027
- Automatically tracks and marks cycle transitions
Price Analysis
- Tracks highest and lowest prices within each cycle
- Calculates percentage changes:
- Intra-cycle (low to high)
- Inter-cycle (previous high to current high/low)
Visualization Techniques
- Background color changes based on current cycle season
- Dashed and solid lines connect significant price points
- Labels provide quantitative insights about price movements
Unique Aspects
1. Predictive Cycle Framework: Provides a structured way to view market movements beyond traditional technical analysis
2. Seasonal Color Coding: Intuitive visual representation of market cycle stages
3. Comprehensive Price Tracking: Captures both intra-cycle and inter-cycle price dynamics
4. Highly Customizable: Users can adjust visual parameters to suit their preferences
Potential Use Cases
- Technical analysis for long-term investors
- Identifying market cycle patterns
- Understanding historical price movement rhythms
- Educational tool for market cycle theory
Limitations/Considerations
- Based on a predefined 4-year cycle model (Liquidity Cycles)
- Historic Cycle Structures are not an indication for future performance
- May not perfectly represent all market behavior
- Requires visual interpretation
This script is particularly interesting for investors who believe in cyclical market theories and want a visual, data-driven representation of market stages.
Contractionandexpansion
Expansion Finder by nnamWhat this Indicator Does
This indicator helps the trader locate expansion and contraction areas in an easy visual way.
When the asset moves from a contraction phase into an expansion phase, the bars change color (customizable). This allows the trader to recognize areas of contraction and avoid trading them. Once a Bar Range moves outside of the average range as specified by the user, the bar will change color informing the trader that the current bar and by default the market, is moving into an expansion phase from a contraction phase.
The indicator works well for those traders that use the Forex Master Pattern to locate Value Lines and Value Areas on the chart giving them an opportunity to draw in these areas with ease.
As shown in the screenshot below, the boxes are manually drawn after the trader locates an easily identifiable area of contraction.
The Indicator makes it easy to find longer areas of contraction and ignore the noise of smaller contractions.
Customizable Settings allow the trader to define the lookback range that determines the number of bars to base the average.
A "multiplier" setting allows the trader to easily adjust the Average by changing the average using a simple calculation.
Example, if the average multiplier is set to "1", the average will be used.
Using the standard average is not always the best way to define these contractions, so traders can set the average to a higher or lower number by using the multiplier, thus changing the calculation but maintaining a consistent number across the chart.
Example: If the average is not plotting the contraction correctly, the trader can manually adjust the multiplier down to 0.5 thus adjusting the average in half or increase the multiplier to 2 thus doubling the average.
As seen in the screenshot below, this changes the number of expansion bars visible on the chart.
Below you can see Value Areas and Value Lines drawn in. These lines assist the trader in defining important levels for future trading.
I hope this Indicator helps you locate value areas and value lines on charts in an easy way.
Any questions or concerns or suggestions, please do not hesitate to reach out.
Happy Trading !!!!
