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and reliable. What you don’t do is “curve fit,” that is, move a cycle in the current time frame to fit perfectly,
when there is then no resulting fit at all in the data just prior to the recent time frame.
The rule of thumb is that a periodic signal must occur 7 to 10 times in the data to have statistical
significance. This would mean that the largest periodic signal that could be reliably tested in 1200 data
points would be about 170 (1200 divided by 7). In 2000 data points the largest periodic signal would be 285
(2000 divided by 7) but you usually need a larger data series to find reliable cycles in the 150 to 250 data
point range as we mentioned. In some rare cases we have done analyses on fewer than 1200 data points
but anything less than 700 is simply not statistically significant.
Starting Cycle (the shortest cycle Techsignal ™ can find)
Default is 8. This default value of 8 means the shortest cycle length which Techsignal™ can find is one
whose period length is 8 data points, if such a cycle with that period length is there to find. No cycle less
than 3 data points can be analyzed, and cycles less than 4 data points probably have little significance.
To find shorter cycles than 8 data points, the data multiple should be changed, if possible, to increase the
number of data points in the cycle; for instance, use daily data instead of weekly data. For example, if you
were analyzing weekly data and you felt there were cycles shorter than 8 weeks in the data, you would
select the Daily icon on the starting Main Menu Data Input screen before running your analysis. This
selection would multiply your data points for analysis by 5; if you felt there was a 6 week cycle, you would
now be looking for a 30 day cycle. This analysis assumes trading days, versus calendar days, if your data
pool is financial data. You can change the default value through the Program Defaults which is accessed
from the Main Menu Data Input starting screen.
Another factor to consider in studying shorter cycles is time. About 85% of the Techsignal™ processing
time is spent finding cycles whose periods contain fewer than 18 data points. Set this Starting Cycle value
as high as possible to shorten your analysis time. The recommended starting period is usually a value just
under the shortest period in which you are interested.
Ending Cycle (the longest cycle Techsignal™ will be able to find)
Default is 12% of the data. This default setting means the longest cycle that Techsignal™ will be able to
find is a cycle whose period, or cycle length, is less than 12% of the data points. Stated another way, this
default setting means that the longest cycle analyzed will occur at least 8 times in the data.
For example, if there were 1000 data points, the longest cycle Techsignal™ could find is a cycle whose
period is 120 data points long, and if such a cycle existed, there must be 8 occurrences of this cycle in the
data. Ideally, a cycle should repeat at least 5 times, and preferably 7 to 10 times in the data for statistical
significance. In the Program Defaults section, the ending cycle is shown as a percentage of the number of
data points, and that percentage can be changed.
The ending cycle must always be shorter than the length of the data series. The longest cycle you can
hope to find cannot be shorter than 1/3 of the number of data points by program design, but even then such
a cycle should occur at least 7 to 10 times in the data to be statistically significant.
Assuming there is sufficient data and you wish to analyze longer cycles with periods of 150 or more data
points, better results usually occur if you first compress your data pool into fewer data points--such as, in
this example, daily to weekly, weekly to monthly, or monthly to yearly, where in each case there would be
fewer data points and the cycle periods found would be smaller, certainly less than 150. For example, a
200-day cycle in weekly data would be a 40-week cycle (200 divided by 5 trading days in a week = 40).
Maximum Number of Cycles to Find
Default is 25. Only the 25 best cycles will be reported. Under normal circumstances, especially with short
data files, that is probably too many. If the program cannot find the number of cycles specified, it will report
only those found. The arbitrary maximum limit is 300 cycles; in practice, the program will seldom find more
than 30 cycles. Though you can change this to a higher value, remember that a few good cycles are better
than many cycles of dubious quality.
Default Folders
The program suggests a directory and a folder for storing the Techsignal™ program and associated files
and folders. They are the C:\ drive and the Program Files\FSCTS folder. If you need to customize these
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