Carrying on with the theme of clusters, in the third instance price moves like this. Not for the novice trader.
The pattern is (Boost – Consolidate – Boost – Consolidate).
You have 3 possible outcomes, 1 of which leads to reversal and the other 2 continuation.
- Red: Buy the rebound when price reaches first area of consolidation.
- Green: Buy a break out from the last consolidation.
- Purple: Leave it alone unless your already in a trade.