CyberCycle

The Cyber Cycle is one of John Ehlers' cycle oscillators, from Cybernetic Analysis for Stocks and Futures. It works in two steps: first it lightly smooths price, then it applies a second-difference filter that strips out the trend and leaves behind the oscillating cycle component, swinging above and below zero. With the trend removed, what remains is the market's rhythm laid bare, which makes it easy to read where price sits in its swing.

How the Toolbox does it

The Toolbox ships a ready-made Cyber Cycle chart that plots the cycle together with a one-bar-lagged copy of itself, as a fast/slow pair, and marks a buy where the cycle crosses above the lag and a sell where it crosses below. The included chart calculates it on the median price, (High + Low) / 2. The same formula runs as an Exploration to scan a watchlist for the latest signal, and can compare against a second symbol.

How you would use it

Read it like any cycle oscillator: an upward cross of the zero line is the cycle turning up, a downward cross is it turning down. Its responsiveness is set by a single smoothing constant, Alpha, which plays the role that a period does in a conventional oscillator — a small alpha gives a smooth, slow cycle, a larger one reacts faster but is noisier. It is especially useful for timing entries and exits inside a ranging, cyclic market, and for confirming the cycle picture you get from the Goertzel and FFT tools.