Uncovering ‘Weird’ Price Patterns
in the Market
How to Spot Unusual but Repeatable Trading Sequences
Sometimes we get a ‘weird’ price pattern that repeats itself for a few days before completely disappearing…
Never to be seen again.
And by weird, I’m not talking about a textbook play like a double top, double bottom or anything like that.
This pattern is more of an unusual rhythm or trading sequence that stands out from the norm.
Better explained with an example… (They aren’t all like this, but this was the most recent.)
NASDAQ
Take the Nasdaq for example.
(I’m using the QQQ ETF here so we can see it more clearly on one screenshot.)
Day One – We had a big drive lower to prior support before kicking into gear and rallying hard, slicing through the VWAP and reaching fresh highs.
Day Two – We did almost exactly the same.
- A similar range of move
- A similar time
- The same relentless buying rally up to fresh highs with hardly any breather.
Sure, the subsequent price action after the rally was different, but that drive off the lows was almost identical.
Ok, so what? I hear you say…
“I haven’t got a crystal ball, no one could have known that would happen.”
(Except for the Instagram traders, they know everything…)
That’s true, but the point is this:
- This is an unusual move
- It repeated the very next day
Now you’ve seen it two days in a row.
Guess what?
You’re looking for it again on days 3, 4, and 5… and it could be a layup trade.
Day Three
Sure enough, day 3 comes around and we get a very similar pattern.
- Down to support
- Hard rally through VWAP
- Breaking fresh highs
So, if you were prepared there’s no reason you couldn’t say “I saw this movie yesterday and the day before, and I know how it ends…”
Then position accordingly.
Now, are they always so blatant?
No, sometimes they are subtle top-of-the-hour momentum bursts or little moves in the last 15 minutes.
That’s when your screen time and post-bell markup routine come into play…
Do they repeat forever?
No. You might get one or two days and then it changes.
The key is to be observant and open-minded to unusual patterns that just look a little different to the usual…