Quote Originally Posted by Billy View Post
Hence, an entry around 85.10 is not so risky as it seems at first sight.
You actually got my attention with this comment and for a good 10 minutes I have been staring at the chart you provided trying to coldly (froidement) evaluate the risk of that particular trade visually. It allowed me to appreciate the beauty of the cluster approach and make the hypothesis that the weights that you cleverly devised are really probabilities that the individual resistances will not be penetrated within a trader's investment horizon which I presume is relatively short.

When one focusses on the specified entry price, it seems to me that this number is probably calculated using a weighted sum of the resistance prices and weights (1,2 ... or 8) for the first resistance cluster as a whole or in other words penetrating WR1(2) and MPP(3) is more likely than SR1(6) and YR1(8) and therefore the ideal entry point must be closer to the weakest part of the cluster.

Whether this is true or not, the exercise has been fruitful for me as this adds another tool in my trading kit. Thank you Billy (and Pascal for the Stop part I presume) for bringing such a powerful tool to this community.