There are a few things that I need to point out about trade targets.
Since the target for a setup is not always met, make sure you use good
money management. This means either moving a stop to breakeven or
trailing one as the trade moves in your favor. This way if you don’t attain
the 1.272 target, you are protecting yourself from a loss. Also note that
the 1.272 target is often surpassed. This is a reason for keeping at least
a partial position beyond your first target. Instead, you can use a trailing
stop on the balance of your position and let the market take you out
when the move loses momentum, rather than trying to determine in
advance how far the market will go and how much it wants to give you
on a trade.
PRICE CLUSTER EXAMPLES
Now let’s go through some price cluster setup examples. To help you follow
along with these examples, I will reference either the dates or the prices of
the prior highs and lows I am using to run the price relationships.