About Rothbard Turning Points

Time is a part of the measuring system used to sequence events, to compare the durations of events and the intervals between them, and to quantify rates of change such as the motions of objects. The temporal position of events with respect to the transitory present is continually changing; future events become present, then pass further and further into the past. Time has been a major subject of religion, philosophy, and science, but defining it in a non-controversial manner applicable to all fields of study has consistently eluded the greatest scholars. A simple definition states that "time is what clocks measure".

Time is one of the seven fundamental physical quantities in the International System of Units. Time is used to define other quantities — such as velocity — so defining time in terms of such quantities would result in circularity of definition. An operational definition of time, wherein one says that observing a certain number of repetitions of one or another standard cyclical event (such as the passage of a free-swinging pendulum) constitutes one standard unit such as the second, is highly useful in the conduct of both advanced experiments and everyday affairs of life. The operational definition leaves aside the question whether there is something called time, apart from the counting activity just mentioned, that flows and that can be measured. Investigations of a single continuum called spacetime bring questions about space into questions about time, questions that have their roots in the works of early students of natural philosophy.

Two contrasting viewpoints on time divide many prominent philosophers. One view is that time is part of the fundamental structure of the universe, a dimension in which events occur in sequence. Sir Isaac Newton subscribed to this realist view, and hence it is sometimes referred to as Newtonian time. Time travel, in this view, becomes a possibility as other "times" persist like frames of a film strip, spread out across the time line. The opposing view is that time does not refer to any kind of "container" that events and objects "move through", nor to any entity that "flows", but that it is instead part of a fundamental intellectual structure (together with space and number) within which humans sequence and compare events. This second view, in the tradition of Gottfried Leibniz and Immanuel Kant, holds that time is neither an event nor a thing, and thus is not itself measurable nor can it be travelled.

Temporal measurement has occupied scientists and technologists, and was a prime motivation in navigation and astronomy. Periodic events and periodic motion have long served as standards for units of time. Examples include the apparent motion of the sun across the sky, the phases of the moon, the swing of a pendulum, and the beat of a heart. Currently, the international unit of time, the second, is defined in terms of radiation emitted by caesium atoms (see below). Time is also of significant social importance, having economic value ("time is money") as well as personal value, due to an awareness of the limited time in each day and in human life spans.

Ray Cummings, an early writer of science fiction, wrote in 1922, "Time... is what keeps everything from happening at once", a sentence repeated by scientists such as C. J. Overbeck, and John Archibald Wheeler.  source

We ask ourselves, how time influences the  Forex market and the coincidence theories. Is the Forex currency market unpredictable? If yes, is it possible to invest on this market? Is there any order in this chaos? If yes, what are the opportunities then? What is the time got to do with it? how can we use the coincidence theory for the investment on the Forex market?
There is an order on the Forex market. However, it is initiated by coincidence. It could be: macroeconomic datas, the influences of world market, and then the technical analysis which many times put pressure on the market participants. Consequently, the participants stop investing in a given direction and the results are: fall in business trade and the change of direction. It is not the rule, though. Investing according to the fundamental datas is not a rule either. Many times we witness a course of events in the exactly opposite direction. Of course, then we read analyses of that which we can adjust to a particular situation. Nevertheless, for us, investors just the fact of some changes in the direction is infrequently surprising in a given moment and making decision what direction to follow is problematic.
Only efficient and composed investor who follows the rules of risk taking is able to control the Forex market. Every trend in a given direction is initiated by coincidence. When it actually starts, it is predictable enough to invest then.
What is the time got to do with it?
Please, give your attention to the fact that we infrequently fell into the time trap of the Forex market. Investing in a given direction, seeing the minuses of a particular position we closed it. After some time, when analyzing market we came to the conclusions that it was enough for instance to shift the graph from 15minutes to 1 hour. It would give us the base and “mental strength” to endure temporary minuses on our account.
It also happens that while analyzing our investments on “the older graphs” we come to conclusions that by opening positions in the given direction, we had made a mistake since we can notice from “the older graph” that the market show exactly the opposite direction.
Another aspect of the “coincidental” Forex market is the psychology of the investors behaviour. By observing current markets (but not only those, it also concerns stock markets) I came to the conclusions that it could be compared to a drunken man who came out from a party and tries to find a way home. Since he is quite weak, by the time he gets home, he was tossed from one side of the road to the other.
The same could be said about financial markets. Giving them directions, by the time they reach a particular goal, the levels change very much and mistake the investors. There is also the sobriety period when the market runs like the wind in one direction, reaching its goal.
It is a very complex issue and is composed of fundamental analysis aspects as well as technical analysis aspects. Please, pay attention to the fact that when an individual investor is a component of a general behaviour of the markets, all of them compose resultant and that influences others and as a result this is a collective behaviour because of which most of the investors give in.
By analyzing the aspects step by step, I will try to prove that exactly on the bases of  this behaviour of the markets which result from coincidental events or a panic (which is a sudden and coincidental event), we may predict the changes of trends.
Some impulses are stronger and some weaker, but all them are coincidental – these are the Forex signals, provoked by a market factor. In the final statement the stronger who are in demand or supply win.

The most important common features of collective behaviour

Following behaviour of a bigger group by an individual, or submitting to the group’s will is known for years and many things have been written about it. The factors having influence on that are: natural environment, culture, political tendencies, etc.
Financial markets also have their own specific behaviour dependent on the kind of market. On the Forex market we may observe that each currency pair has its “separate life”. It is influenced by the varieties of market factors.  Investor by accepting behaviour style of a group (inspite of considering himself as an individual), in real receives stimulus given by the group. On the Forex market these are called breakouts, the reactions on economic datas, etc. Taking decisions about investments, maintaining individuality the investor really either accepts a particular behaviour or not. Much worse is a protest and therefore irrational behaviour. All of it then translates into market value, in other words Forex signals which are the resultant of all behaviours and therefore its mess.
It is not an abstract image of the world, economic crises also result from these factors (giving loans with no security and on the other hand charging it – euphoria linked with protest).
Summing up what I have written before, collective behaviour is “two-faced”. It is essential to recognize the true face, in the Forex market it is the recognition of the right trend.

Behaviour of an individual in a group

Aiming this article at investors who have different experience on the financial markets, I am wondering whether they happen to invest in the ups and downs where trend was really close to the end and whether they invest even if they considered it as a wrong decision or really risky one? Certainly, they did. Despite their individuality and independence in decisions taking, they did. It happens because to some extent an individual feels being a member of a particular group. It is dependence on many levels of community, starting with civilization, through societies, and subsequently the varieties of groups.
Each group has its own rights and duties and then again they translate into a bigger community reaching a point of generally approved behaviours. Different kinds of break ranks from a group may lead to some conflicts, sometimes really serious ones, but focusing on a Forex market again, this is the time when there are many changes of trends. Of course, these break ranks are one of many factors that influence the trend and distribute Forex signals on the market. Those who consider this trend as its end start organizing a new group. We may divide them into those supporting the demand and those who support supply. This is the typical ability to organize. The stronger group wins, when there is a draw, we observe horizontal market.
Even though every investor observes particular Forex signals and makes individual decisions, to some extent he always assimilates into a chosen group and unintentionally takes its behaviour. Consequently, it may lead to wrong decisions, e.g. keeping a particular financial instrument too long instead of getting rid of it when there was time to.
The main factor that influences changes in a group, translating it into financial markets, the so-called direction trends, is the exchange of information. Those behaviours had been described long ago in the system theory which basically states that every particle in a given structure is in harmony with the others. All kinds of disturbances in this order are the driving forces behind changes in a given structure, or its neutralization. It depends on the force of these changes. It is very easy to notice here a similarity on the financial market. If the trend is quite powerful, small changes cannot disturb it. However, if there are many strikes in the opposite direction, the whole community structure which belongs to a given direction falls apart and a change begins.
While there is an existing trend, those who counted on some corrections are neutralized which means they loose money, or at best they reach break-even point.
The whole process works thanks to the possibility of information exchange and the reaction on particular events, in this case different kinds of market factors. This exchange is not easy. It is very often changed a bit, caused by variety of emotions which can be either positive or negative.
It could be compared to the “Chinese whisper” game. The more people pass one particular piece of information, the more it is changed. It all explains different kinds of behaviour on the financial markets, behaviours without logic and wrong Forex signals.
A considerable influence on the communities has the so-called leader. In our case it might be a group of analysts, brokers, or people who have influence on financial policy of a given country. The latter have the power of overturning the market by their statements.
The subsequent element that features community is the ability to adapt to the constant changes. Let us consider the financial crises which force investors to perform particular behaviours aimed at accomplishing transaction, that is to the best possible work. This could be greater caution or larger security, etc.

Community behaviour

Forex currency market is really unpredictable in its procedures. The shorter the time unit which we use to analyze given situation, the higher risk of making the wrong decision. It happens due to the full market automation and therefore, in this short length of time it is not that the people make decisions but the machines make the trend do the job and they are the ones causing panic.
However, in a longer lengths of time we may recognize trends and while behaviour of an individual is hard to predict, the community behaviour is predicatable and we forecast on this base.
This forecasting could be dived into two schools. The first one is based on theory that the market reflects the economic situation. The second one says that all the fluctuations in prices forecast some events and expectations of investors on fundamental factors which had already been exploited on a given market.
Economic forecasting is based on fundamental factors and also on the relation between demand and supply and then in return there is some correlation between social and political tendencies.
The major science helping us to define trends is statistics. Moreover, working on my own system, I took into consideration exactly those factors as the most important.
Additional tools which help us to predict community behaviour is technical analysis. This analysis is used to determine the price levels to which market heads for more or less.
The analyses of serious financial groups play a great part here. These groups provoke a specific number of investors to act according to their interpretation of a market and moreover it does not matter whether their analyses are right or not. It is the same with groups who put their own forecasts, recommendations and Forex signals on the market on the bases of fundamental factors.
Everything that I have written above has one big conclusion: predicting the future on the bases of present and past actions. This phenomenon is so complex and understood in so many different ways by various groups that it causes many misunderstandings. There are supporters of fundamental analysis only, there are supporters of technical analysis and finally there are also those who take into consideration all factors.
Financial market cycles have their own specific features and differ from each other greatly, depending on the instrument, country, political situation, etc.
Nevertheless, when we take into consideration Forex currency market using main currency pairs, we talk about global approach and still speedy transfer of information contributed to spontaneous creation of a common market in a small “information village” which is today’s world. The driving force of these cycles on the market are basically two types of investors who differ from each other. These are the so-called bulls and bears who bet on currency strengthening or currency weakening. The fundamental unit of these groups are individual investors who merge together, exchange information and often support each other. It is all about emotions that influence a given group. It is satisfaction when everything goes according to the plan and disappointment in case of the market going in the opposite direction. Creation of a new trend have a big impact on a particular group and in a given behaviour increases gradually, sometimes in a form of panic. This is the time of a sudden change in prices.
The so-called leaders play additional part of assessing market situation. On the Forex market we deal with a whole range of analyses revealed by brokers, banks, investment companies or single market gurus. It is of an enormous significance for fluctuations of price, but it is not enough said. It also have an impact on the mess that occurs in small units of time. Here, to our rescue comes an appeal to a long time-frame and we also check the levels and the force of demand and supply on a particular instrument.
Of course, we very often deal with horizontal market where atmosphere of the market from various reasons is not shaped yet. Awaiting financial and political decisions is one of the most frequent reasons. Horizontal market is very often the result of discounting the investors’ expectations and only surprising pieces of information may cause sudden change of trend. That is broad outline of how market boom and slump works.
Taking every market aspect into account, I worked out a system which generates Forex signals.
Rothbard Turning Points is a system created on the bases of a number of statistics and comparisons which take into consideration market factors and the market actions and therefore it takes into account psychology of the Forex market. Turning points generated by system every day are the results of it. They are used daily on a blog.