Chart patterns that repeat themselves - is this normal?

I saw a rather curious pattern forming on the AUD/USD pair. Is it common to see chart patterns repeating themselves? And what is the reason for this? I just think it’s weird. I’m halfway through the School of Pipsology but haven’t read anything about this yet.


Yes. Just like human needs to **** everyday !

You bet, chart patterns repeat time and time again, they will never be exactly the same (just like snowflakes!), but it can be a very important part of your trading strategy.

I would say that this is quite an apt analogy. Sometimes you get constipated for several days, other days you have explosive diarrhea, but most of the time the output is pretty average. Of course, the frequency of all these depends upon the person we’re talking about.:33:

These patterns (double tops and double bottoms) are basically S&R levels manifesting themselves. In case you’re doubting the rigidity of these concepts (which is normal) here’s a tiny excerpt from a research on S&R level (by Carl Osler)

A rigorous test of the levels specified by six trading firms during the 1996-98 period reveals that these signals were quite successful in predicting intraday trend interruptions. In addition, the predictive power of the support and resistance levels appeared to last at least five business days after they were first communicated to customers.

I see what you’re saying with the quote about 1996 - 1998, but you must remember what might be effective then might not be now in these volatile times and also there was no real EURO in 1996-98, so a completely different environment, but there things that always hold true but to a different extent and in a different context.

Thanks for the replies. But is there a reason for this? Is it bots? I just think it’s weird to see a near-exact repeat in terms of volume and timing of buyers and sellers.

I call it the Groundhog day (the movie) effect. I have seen almost the same pattern repeat 3 days in a row. But then, of course, when I have figured out the best way to handle it, it doesn’t happen again for several weeks and by then I have forgotten. The most recent was the E/U during the Asian session. It would break out to one side for about 20 pips, then reverse and within 15 minutes, the 20 pips was gone and from there would make a 50 pips run in the other direction.

The reason is because they naturally occur (specifically around harmonic patterns like we trade). These patterns are created outside the forex market in nature and thus would only make sense to be also in the market. Since humans are the ones trading and humans are full of patterns, then there should not be any surprise our doubt about why so many successful traders use patterns in their methods, specifically harmonic patterns and fib based patterns.