There is a common belief that history tends to repeat itself. This lays down the basis of technical analysis.
And history does not only repeat. There are situations when technical patterns are inserted in exactly the same patterns, but at longer timeframes. And both such patterns gain shape simultaneously, copying each other’s shape. This is a simplified explanation of the occurrence that in Fractal Geometry got the name of Mandelbrot sets, named after the scholar who revealed this property.
In this idea, the role of the trading signal is played by the primary level of fractality – a repetitive pattern or image in the graph of a financial asset.
In the graph of EURCAD, we can see 2 identical “stories”.
The first story evolved from August, 2019 and finished with a strong upward breakout in January-February, 2020.
The second story is taking place now, and it almost completely mirrors the geometry of the first one. As for now, it has gone almost 80% of the previous path.
But will it reach the same finale?