Fibonacci Price Cluster Set-up for BTC I look for coincidence of at least three Fibonacci price relationships that come together within a relatively tight range. This identifies key support or resistance zones that will define my trade plan. I look at three retracements, three extensions, three projections or any combination of these relationships. This gives me my trading edge. Doesn’t mean that every trade I take is a winner it means that I have a higher percentage of winning trades and that makes the difference in being a profitable trader. These price clusters or confluence zones tend to be a magnet for price. They work mostly for trade entries in the direction of the trend. Go with the flow. So I am looking for clusters on BTC that show up ‘counter’ to the trend in order to manage my risk. For example on the BTC daily chart I am looking for a support confluence - I wait for price to retrace on a daily chart as that is my time frame as I am taking a position trade as my bias is BULLISH long term. So look for a support cluster for entries on the BUY side and resistance clusters for entries on the SELL side. As BTC has made a general pattern of Higher Highs and Lows I am focussed on Buying into the trend. My minimum trade target is 1.272 extension of the swing cluster zone. My second target is 1.618 then 2.618.
When analysing Fibonacci price retracements we run the relationships from the prior Low to the High. There are two obvious swings that I will choose to run the fibonacci price retracements from; The 902.41 low to the high 4979 The 2983 low to the high 4979 I look to see whether this makes any sense or not. Then I need to determine what projections I can run for possible support; I want to compare the prior corrective declines in this bullish swing on a smaller time frame the 4 HR chart and analyse key swings to see where price may terminate. The chart identifies the zone where there are overlapping price extensions; 1.272 extension of the 4131 High to the 2975 low = 2668 1.272 extension of the 4443.8 High to the 2975 low = 2589 2.000 extension of the 4473 high to the 3586 low = 2730 0.50 retracement of the low 589 to the high 4979 = 2578
The overlapping area or cluster zone is where I will look for confirmation to take my trade. On the hourly I will be looking for a dojo candle to confirm the bulls are in the zone and a 1-2-3 pattern a Higher High or a Higher Low or a Super Higher High patter to confirm the Change of Trend to enter a low risk position trade.
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