In the principle of Harmonicity, how are subcycles related to the dominant cycle?

In the principle of Harmonicity, subcycles are indeed related to the dominant cycle by small whole numbers, typically 2 or 3. This concept is fundamental in technical analysis as it highlights the repetitive nature of market movements over time.

When analysts identify a dominant cycle, they look for cycles within that cycle which exhibit a predictable proportionality. This means if the dominant cycle has a certain duration, subcycles might manifest at intervals that are fractions or multiples of that duration, often following a harmonic pattern such as one-half or one-third of the dominant cycle. This relationship allows traders to forecast price movements more effectively by recognizing these subcycles, as they often reveal critical points of support and resistance in the price action.

Understanding this harmonic relationship between cycles enables technicians to identify potential turning points in the market with greater accuracy, emphasizing the importance of recognizing smaller cycles within larger cycles in forecasting price movements.