[tommyfx]

Its imposssible to predict the future but you can definately use the past to give you an assumption of what will happen in the future.

Psychology rules the market, if the price went up from (y) to (x) and everyone started to close their positions and take profit at (x) and prices reverse, when prices reverse like that you are taking money from the poor people that went long at this point. These poor people are now holding losing positions, if they aren't stopped out chances are they are going to try and get out at the best price possible, so when the price gets to (x) again these people will think, "the price reversed here before, there is a chance it will again so i will get out at break even" again people sell at (x), this is combined with the good traders that got in at (y) with a profit target of (x) who also sell at this point. You now have a trading range and the longer it holds the stronger it becomes all because of past performance.

Eventually prices will go above (x) or below (y) but this is only when something happens on a macroeconomic scale that says these levels are invalid and its time to move to a new trading range.

This is how markets work, of course a few extraneous things happen, but nothing in life from trading forex to boiling an egg is exactly the same everytime and you probably live in a dark and scary world if you assume nothing will ever change, i believe markets are very organised about 99% organised 1% random in my opinion and looking at past performance is a good way to start understanding what is likely to happen in the future.
But i suppose newbies would say markets 99% random, its just learning what to look for.

Tom