Hurst Future Lines of Demarcation for Multi-Cycle Market Signals
Summary
The strategy applies J. M. Hurst's Future Line of Demarcation concept by shifting price data forward by half of selected cycle lengths. It compares signal, trade, and trend FLDs to classify market states, then uses price interactions with the signal line for entries. Configurable crossovers between price or FLD lines can trigger exits. The document gives an example of a 40-day cycle producing a 20-day offset and describes a sequence of market phases based on the relative ordering of price and the three lines.
The method is presented as a way to interpret trend and consolidation across multiple cycles, but the forward plotting should not be mistaken for knowledge of future prices: the values come from historical data shifted on the chart. The document identifies sensitivity to cycle settings, lag, changing market conditions, and overtrading as limitations. It supplies no performance evidence, and recommends testing parameters, timeframes, filters, stops, and position sizing.
Key ideas
- Each FLD is formed by shifting price data forward by half the selected cycle length.
- The strategy compares signal, trade, and trend FLDs to classify market states and generate entries.
- Exit triggers can compare price with selected FLD lines or compare two FLDs.
- Forward plotting does not establish predictive information beyond the historical price data used to construct the lines.
- The document reports no performance results and flags parameter sensitivity, lag, and overtrading risks.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.