I've run accross this FFT cycle indicator in the past couple of weeks. It is very interesting to say the least. I would like to know if anybody else has any experience with this type of cycle analysis.
I've know of Hurst, Clyde Lee, and Brian Millard. Brian Millards' work is among the best I've seen. Check out this page if you haven't seen his work yet:
Brian Millard
The only thing is I am unsure as to the correct usage of this indicator.
I've been watching how these cycles work for weeks. Sometimes they are spot-on, other times they are out of sync. And, I think they are out of sync because of news that causes a major shift in the outlook of a currency. Its like throwing a stone into a pond. New waves cause the other waves to change phase.
Just playing around this morning (at work!?!?), I wanted to see how these cycle indicators would react. So, after the news, I began watching prices.
I'm using the 1M EURUSD because my account is small (FXCM), but the cycles still seem to work. From these pictures, the RED indicator is a composite of the highest magnitude of 7 cycles. The other colors are the top 4 cycles.
After the news, prices hit the daily pivot. The composite and individual cycles predicted a down move after that "Winding spring" just below the daily pivot at around 1.4320. The light green and orange cycles are topping out. The dark green and aqua are already on the way down. So I got short just before the downside break at 1.4312.
Putting my real money on the line, I made a nice low risk 45 pips for the day.