Okay, let's get straight to it. In physics and mathematics, a sine wave or sinusoid is a mathematical curve that describes a smooth periodic oscillation.
Key Points: You only need to understand 3 concepts about a wave:
Waves are described using the following terms:
Peak – the highest point above the rest position. Trough – the lowest point below the rest position. Time period – the time taken for a full cycle of the wave. Usually measured from peak to peak, or trough to trough.
Source: BBC
Let's apply it in the financial markets:
Peak = Top Trough = Bottom Time Period = The time taken for a complete market cycle.
TRUTH IS YOU DON'T NEED FANCY INDICATORS. Using these three key information, you can detect the top and bottom of any market given it forms one full cycle. Apply it and backtest it. Lemme know your surprises.