The purpose of this sub chapter is to introduce you the concept of cycles under the Elliott Waves Theory (also known as waves of different degrees) and I will do this by making a top-down analysis on one currency pair, this time eurusd. A top-down analysis is when starting from higher time frames (monthly chart) and going to lower time frames with your analysis, even to hourly chart.
In order to do such an analysis you need to know where to start from and when each wave of a different degree is ending. For that purpose there are different ways of counting, putting different numbers (capital letters, underlined, etc) or using different colors (my preferred way) when counting. So, for example, if you are doing your analysis for a monthly chart, if you want to have a more in depth look of the structure/pattern more close to the current price action, you need to go on a smaller time frame, like four hours chart or even one hour chart. When you do that, your previous analysis on the higher time frame is not visible anymore, so you should know where is the starting point for your analysis on the shorter time frame. And this counting code will help you identify waves of different degrees, or cycles, if you want.
This sub chapter will have 3 different recordings showing you how to do a top-down analysis and how to spot/mark different cycles for different degree waves. You have to remember this is just the beginning of this project so things presented in this first chapter are just introductory.