| | | | How Repeating Pullback Sizes Can Help Predict Future Moves
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How Repeating Pullback Sizes Predict Future Moves
I've got to show you something that's been working for me over and over again, a pattern I call the “Echo trade” — and I've made a lot of money doing this over the years.
Here's the concept: The same size pullbacks tend to happen in the market over and over again. And then the same results kind of come out of that.
Let me show you exactly what I mean with a real example that's playing out right now in iShares Bitcoin Strategy ETF (IBIT).
How the Echo Pattern Works in Real Time
I was looking at IBIT's chart recently, and something caught my eye. There were two identical pullback patterns that had already played out. So I did something simple but powerful — I copied that pullback line from those two previous identical moves and overlaid it on the current price action.
What happened next? The market respected that line almost perfectly. Now here's where it gets interesting...
If we can turn and do the same move we've done twice and do it again, this puts IBIT up here in the $80s.
This is the third iteration of the same pattern. When you see something repeat twice, you'd be smart to watch it for the third time — because markets have this funny habit of doing the same thing over and over.
And before you think this is about narratives or news or whatever story people are telling themselves — it's not. These things have a habit of doing the same patterns over and over. It's not about narrative, it's not about news — it's price patterns.
These price patterns often tend to work out over and over and over. If you could just take a step back, turn off the news, not pay attention to the nonsense, the price patterns tell you the truth in the market.
The Psychology Behind Why This Works
Here's something most traders miss about why these patterns repeat: Market psychology demands it.
We can't go higher when everybody's already in. You've got to shake out the weak hands, you've got to create some FOMO. When this thing starts turning on a dime and ripping right back up, then you got FOMO, and then you can project it on up there.
That recent pullback in IBIT? That's exactly what we needed.
The Echo pattern isn't some complicated algorithm or esoteric indicator. It's about recognizing that the same or similar size pullbacks happen over and over again, measuring them precisely, and then watching for the market to repeat what it's already shown you twice before.
I've been doing this long enough to know that when you find a pattern that works, you don't overthink it. You just follow it. And right now, this Echo setup in IBIT is setting up for another leg higher — just like the pattern suggests.
Turn off the noise. Watch the patterns. Let the market show you what it wants to do.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
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