In the first example of a price cluster setup, I will walk you through
each step, starting with looking at a blank chart and deciding which side
of the market to set it up on. In the later examples, I will still illustrate
where the price cluster relationships are being projected from, but with
fewer charts than in the first example.
Let’s look at a blank E-mini Dow chart to decide which side of the
market we want to set up. Here we are looking at a 30-minute chart of the
June 2007 contract (see Figure 6-3). To me, the pattern is clearly defined
as bullish by the general pattern of higher highs and higher lows. Since
I want to focus on setting up my clusters in the direction of the trend of the
chart I am analyzing, I want to set up all possible price support relationships
in this case. Then I will look for a confluence or clustering of price
relationships that will define my trade setup.
Fibonacci Trading: How to Master the Time and Price Advantage
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