Non-Linear Indicators – Cyclic Time Part 1

Why don’t we use the last n-bars of several years ago instead of using present last n-bars to derive the current condition?

“The progress of physics will to a large extent depend on the progress of  non-linear mathematics.” Werner Heisenberg, Nobel Laureate 1932

In our “western thinking” and “left-brained” world, we always use the linear concept of time. It has become so “normal” in today’s world that no one questions it. However, awareness of the consequences can have a tremendous impact when building technical indicators and trading systems.

Today and in every charting application, technical analysis is placed in the logic of linear time. The important question now is: Why don’t we use the last n-bars of several years ago instead of using present last n-bars to derive the current condition? (That would be cyclical logic)

Why are the current last n-bars important for judging the current condition?

Nobody questions this since we believe that there is only one rule set for time: linear. Hence, all our indicators are based on the linear time concept of our “modern” world.

However, perhaps the bars n-days/years in the past related to a given cycle are more important to rate the present condition than the current last n-bars. This would correspond to the cyclical concept of time. Unfortunately, this idea is not available in any technical analysis platform for building technical indicators.

A cyclic module for automating the transformation from linear into cyclical time based on any one of a full range of cycles and indicators is available in the WhenToTrade platform. This module will be the first charting platform able to build non-linear predictive indicators and mechanical trading systems.

Please watch the following presentation on the power of non-linear indicators, Metonic Cycles and how to build them.

Please also read the follow-up article: “Cyclic Time Part 2

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