# Hacking the Uncertainty Principle: Time Frequency

### Wavelet convolution is a powerful signal processing tool, used on Sigma-L to examine cycles in markets that are changing in power and frequency over time. We look at some of the key features

## Time Frequency Analysis and the FFT

Time frequency analysis and the fast Fourier transform (FFT) are two approaches used to analyse the frequency content of a signal. Financial markets can be thought of as noisy signals, a time series that is assumed to be composed of a number of periodic functions and random components. Time frequency analysis allows for the identification of how a signal's frequency content varies over time, while the static FFT provides a snapshot of a signal's frequency content at a single point in time. The FFT squashes any temporal information out of the final analysis (how a signal is *changing *over *time)* and is solely based in the *frequency* domain.

At the time of writing Profit Magic for Stock Transaction Timing there was huge excitement over the newly established FFT algorithm and it’s application across a great many disciplines. Areas of modern life we take for granted now - the internet, mobile communication, streaming video and much much more, were made poss…