Financial Glossary Header Image

Cyclic Analysis

Updated on March 17, 2023

The term cyclic analysis in technical analysis refers to a type of study of market cycles to identify trends and ultimately make informed investment decisions. The idea behind cyclic analysis is that markets move in recurring patterns or cycles, and therefore, by understanding these cycles, traders can effectively identify when a market is likely to change direction.

How to use cyclic analysis?

Cyclic analysis typically involves studying longer-term price charts and looking for recurring patterns in market behavior over a period of years or decades. This information is further used to identify market cycles to successfully make predictions about future market trends.

What are the most common market cycles in cyclic analysis?

The most common market cycles studied in the cyclic analysis include –

Long-term cycles

These cycles last for several years or even decades and are typically driven by long-term economic and geopolitical trends.

Intermediate-term cycles

These cycles last for several months to a few years and are often driven by seasonal patterns and economic data releases.

Short-term cycles

These cycles last for a few weeks to a few months and are driven by short-term market sentiment and technical signals.