How the markets work
Financial markets are a modern implementation of the traditional concept of an auction, where buyers and sellers negotiate prices to reach an agreed value for a sale, whether that be stock in a company, a currency, a commodity or precious metal.
But how do these markets actually work? Why do the prices rise and fall in the way they do? The answer to these questions lies in what we call The Game. Not because it isn’t serious - far from it! There are vast sums of money at stake. But understanding the rules by which the game is played provides extraordinary insight.
Hurst Cycles
Over 50 years ago, an aeronautical engineer called JM Hurst used mainframe computers to solve the riddle of the price movements of financial markets. He discovered they are influenced by a particular combination of multiple cycles.
The analysis process that Hurst defined provides insight into an often-overlooked aspect of financial markets: time. Hurst cycle analysis provides a powerful method for understanding the relationship between price and time, and enables us to anticipate turns in the market, as well as generate price targets.
