All equity (or forex or commodity) price movements
have many elements in common (in other words similar classes of tradable instruments
have price movements with much in common)
The Principle
of Cyclicality
Price movements consist of a combination of specific
waves and therefore exhibit cyclic characteristics.
The Principle
of Summation
Price waves which combine to produce the price movement
do so by a process of simple addition.
The Principle
of Harmonicity
The wavelengths of neighbouring waves in the collection
of cycles contributing to price movement are related by a small integer value.
The Principle
of Synchronicity
Waves in price movement are phased so as to cause simultaneous
troughs wherever possible
The Principle
of Proportionality
Waves in price movement have an amplitude that is proportional
to their wavelength.
The Principle
of Nominality
A specific, nominal collection of harmonically related
waves is common to all price movements.
The Principle
of Variation
The previous four principles represent strong tendencies,
from which variation is to be expected.
Further information about Hurst's Cyclic Principles can be found
here.
