|Traders turn profits by anticipating price movement.
Although this sounds simple, many market participants
don't understand how to locate impending change. Stock
prices move back and forth endlessly. But when do these
common swings represent good trades and when are they
just dangerous noise? One answer lies in the
relationship between price and time.
||The singular goal of trading can be defined as locating
price expansion just before it happens and taking a
position to capitalize on the event. When price moves a
greater distance over a lesser period of time,
individual chart bars and candlesticks expand in length.
This range expansion signals those points of greatest
opportunity for traders and investors.
|Clear Air identifies horizontal chart levels where prior
stock trends exhibited sharp price expansion in either
direction. The stronger the CA event, the more likely
that price will trigger volatility on the next pass.
This tendency allows traders to locate outstanding
trades with little more than quick visual scans of their
favorite stock charts. CA prediction is simple: the more
often those bars expand through the same levels, the
more likely expansion will continue.
Congestion limits volatility. Range expansion represents
the state of least congestion and greatest volatility.
However, it cautions traders to manage risk closely as
opportunity and danger stand side by side. Although
price may have sharp momentum in one direction, defense
trading must be exercised. Clear Air space can produce
Predicting natural swing points in pre-existing Clear
Air utilizes only known support/resistance and fibonacci
retracement levels. Since traders tap detailed price and
volume from prior passages, those points can be used for
cross-verification to reduce risk. High probability
setups can be easily identified with natural entry and
Clear Air exists at new highs and lows as well as prior
price breaks and trends. But locating safe positions in
this Clear Air requires detailed fibonacci projections
and may lead to conflicting outcomes. Only disciplined
traders should play on this dangerous field. Major
breakouts and breakdowns often print few congestion and
swing points that traders can use to identify
support/resistance. And positions must be taken without
the benefit of information from prior passages through
the same price levels.
|Fibonacci and Clear
Air: Apply a fibonacci grid after a Clear Air
series to reveal hidden reversal zones not
apparent during the event. Try placing a grid
over new sharp expansion moves to anticipate
where opportunities will emerge on next
retracement swing. When trading Clear Air,
always rely on the chart in the next smaller
time frame to locate low risk entry and exit