Dejavu is a term used to describe a feeling that one has lived through the present situation before.
How does this tie in with the markets?
is based on patterns repeating itself over and over again. Technical analysts believe past trading activity and price action can be valuable indicators to future price movement.
How can we prepare ourselves?
Some of the ways we can prepare ourselves is by doing the following:
– Learning patterns that reoccur over and over again such as bull flags, etc.
– Identifying formations and understand what they mean e.g. candles means there’s a possible trend reversal from to
– Learning to identify structure levels where price can react in the future
– Understanding fibonacci and learning how to use it effectively.
[Once we’ve identified a possible market dejavu moment, what next?
Following identification, the next step is confirming whether this is in fact a similar move to historic price movements. The types of confirmations that can be used are the following:
– Trendline breakout
– Fibonacci rejection
– Lower timeframe patterns
– Moving average strategies
EURUSD – The Dejavu Effect
5. Minor drop. Once price broke down, we had a minor drop.
6. Major drop. After another small correction we had a major drop.
Notice how we didn’t specify whether we were talking about the Blue phase or Red red phase… Dejavu.