DominantCycle

Background

Almost every adaptive technique starts with the same question: how long is the market's current swing? The dominant cycle is the answer — the number of bars the price is cycling over right now. Knowing it lets you set indicator lengths automatically instead of guessing a fixed period, so an RSI, stochastic or moving average can stretch in slow markets and tighten in fast ones.

DominantCycle returns that period as a per-bar array. What makes it flexible is the optional Engine argument: the same function can measure the cycle several different ways, from the low-lag Homodyne default to a sharp Burg spectrum or a fast-adapting Kalman tracker. See Cycle Engines for a full description of each engine and when to use it.

Function

DominantCycle(Price, Engine = 0, Alpha = 0.07)

Parameter	Description
Price	The price array the dominant-cycle period is measured from. It must not contain empty/null values at the left edge of the data.
Engine	Optional. Which cycle estimator to use: `0` Homodyne (default), `1` Ehlers alpha, `2` Autocorrelation/Mesa, `3` Burg, `4` Kalman, `5` Multitaper. Defaults to `0`. See Cycle Engines.
Alpha	Optional. Smoothing constant used only by engine 1 (Ehlers alpha). A smaller value gives a smoother, slower period; a larger value reacts faster. Must be greater than 0. Defaults to `0.07`. Ignored by every other engine.

Returns a per-bar array of the dominant-cycle period in bars. The spectral engines (2–5) leave a long warm-up region at the start of the data empty.

Usage

The classic use is driving an adaptive indicator:

periods = DominantCycle( Close );          // engine 0 (Homodyne) by default
myRSI   = VariablePeriodRSI( Close, periods );
Plot( myRSI, "Adaptive RSI", colorRed );

To use a different estimator, pass the engine code. Only engine 1 reads Alpha:

burgCycle  = DominantCycle( Close, 3 );          // Burg, sharpest resolution
ehlersDC   = DominantCycle( Close, 1, 0.05 );    // Ehlers alpha, smoother
Plot( burgCycle, "Burg cycle", colorBlue );

Warning

An Engine outside the range 0–5, or an Alpha of 0 or less when using engine 1, produces an empty result. The spectral engines also need plenty of warm-up history (roughly 50–100 bars) before they return values.