My systems point to a large drop during next two weeks but that will not be the beginning of a new leg down but just a way to deliver margin calls IMO. Holiday period is coming up in a few weeks and big players have a lot of expenses, you know, wife, girlfriends, boyfriends, kids scattered around the world, presents to make to big clients, trips to take for skiing in the Alps, and so on... They usually cover those expenses with the losses of retailers on margin call.
One of many reasons so many lose in the greatest game in the world, is too many trader's backgrounds require logic, engineers, doctors, accountants, pilots, computer specialists...etc Trading is nothing but emotions of fear. When one backtests ideas, most think it is just numbers they are testing, but it really is not. One can take a song and attach numbers to notes and find patterns within, but when played, most likely it will not be a fine soothing melody. One might contend it is not emotion of fear, next time you have a signal to enter, and you certainly would not be entering for a losing trade on purpose, doing five times the unit size than normal, and you can then feel the emotions within you. They won't be like "hey, think I will go to the kitchen and make me a big sandwich", you will be glued to each tic and if next tic goes down-intense fear will hit you, and every tic against you gives off a different emotional fear, if the trade goes in your favor, instant relief till price down tics and fear comes back, not till you are stopped out for profit or loss and feel some relief. The one lot trader generally feels this all the time. Stress makes us all react to other than our rules dictate. I have a nerve disease, and there have been times where my finger on the mouse will tap several times without me knowing it. And if by chance it is on my trading platform, so instead of being in say a ten lot, my screen will say fifty, instant Wahoo emotions. And no, not going to put speakers on, got tired of all the noise. We have all done "fat finger" trades, so it does occur in all. Turning point in my trading 25 years ago was to realize this. At highs, emotions are different from at lows (charts show this), just the same emotions are different at 20% unemployment that 4%. Women (And musicians) actually make for some of the better traders as they are much more in tune to emotions and aware. The "Exact Science" to me is how you interpret your stats on backtesting in relationships to where price is on the chart. One has to certainly mix the science and emotions together to succeed, but most are unaware that they do. I don't look at just overall numbers, but by seeing where the winning trades are within the emotional content of the chart, can lead to repeating the winners. But these are my beliefs and nothing is exact.
Back to understanding "Cycle 1"... The main difficulties so far are: 1. Navigating through the flow chart. Where should I be? Where should I or could I go next? 2. Perceived freedom of choices. Sometimes there seem to be two or more "correct answers". Jack's choice is different from mine. 3. The "N" box. Need a better understanding.