Trading patterns: History repeats itself for futures traders
January 17th, 2024
Futures trading is all about recognizing trading patterns. The basis of successful futures trading involves identifying a pattern in the market and placing a trade when that pattern’s recurrence is expected.
In a recent NinjaTrader Ecosystem webinar, Chartmap Founder Joshua Benton discussed “Introducing Automated Market Mapping.” He explained that human beings respond to the same environment in the same way over recorded time. If a particular environment repeats itself, then the human behavior associated with that environment also repeats.
“Traders respond the same whether to technical metrics, the geopolitical climate, or anything that isn’t new to the human experience,” Benton said. “History is full of recurring themes, because humans keep doing what humans do. There are always historical patterns to be found in the market, and they can be incredibly useful to futures traders.”
Benton emphasized that traders should focus on studying past data for patterns that might present opportunity when they appear again. “The markets are not random,” he said. “Price does repeat itself.”
Trading patterns recognition in history
The next step to benefiting from market pattern recognition is automation. In its most general form, pattern recognition is known as market geometry. According to Benton, broadly speaking, market geometry is the relationship between price and time. By using various chart drawing techniques, traders can highlight this relationship to make educated market predictions.
Futures traders can benefit from historical pattern recognition when trading. View the full webinar for specific techniques in recognizing predictive price patterns in detail.
Interested in more futures trading tips?
Enter Email for Updates