THE HAnDbook of TECHniCAl AnAlysisA price cycle may be defined in terms of:■ (^) Amplitude: This refers to the magnitude or size of a cycle and is represented
by the distance measured from peak to trough in terms of dollar, pip, or point
value. The amplitude of price cycles may be classified into:
■ (^) Up cycle amplitude
■ (^) Down cycle amplitude
When the absolute values of the average up and down cycle amplitudes are
equal, the market tends to move sideways. A larger absolute value in the average
up cycle amplitude suggests that the market is bullish and rising, whereas a larger
absolute value in the average down cycle amplitude suggests that the market is
bearish and declining. See Figure 20.2.
figurE 20.1 Cycles.
figurE 20.2 Average Up and Down Cycle Amplitudes.