Repeating patterns occur regularly in nature and in the markets, with self-similarity but not necessarily with exact precision.
Â The golden ratio has been popularized in wall street folklore, and any serious student of the markets will need to determine for themselves how to apply these mathematical proportions to their trading.
Further studyÂ including the fascinating Fibonacci sequence leaves one’s mind bewildered by the complexity of the discipline. There is obvious truth to the sequence, but which side is winning? How do we utilize and effectively applyÂ this information?
Every trader needs to develop a methodlogy that makes sense for his or her ability to “see”, bringing order and a systematic approach that can be duplicated. Trading is about finding the current market rhythm, and allowing good trades to develop accordingly.
Minimizing risk by taking trades near confluence orÂ fibonacci clusters usually provides us with guidelines for a reasonable entry. If our judgement is correct, then opposing levels allow us a prudent exit for our trades.
As usual, today’s movement offered numerous occasions to witness these principlesÂ repeat themselves with regularity. Practioners who were able to discern the true nature of the price level of the market made money.
The dance is alwaysÂ the short term against the long term, creating endless flow.