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change over time. These overlays are observed as traversing diagonally across the

charts, unlike price overlays where all information about future price reaction

levels are located horizontally, purely on the price axis. Note that although these

price‐dynamic overlays depend on time to ultimately determine the precise reac-

tion levels, they are predicated or based on price information, mainly in the form

of significant inflection points and average price.

Below is a list of popular price‐dynamic overlays that form the basis of dy-

namic price clusters:

1. Trendlines and channels: Uptrending and Downtrending Lines and Channels,
   Linear Regression Lines


2. Event‐based channels: Donchian Channels


3. Fixed percentage and price bands: Moving Average Fixed Percentage Bands,
   Fixed Price Bands


4. Volatility‐based moving average bands: Starc and Keltner Bands, ATR Bands,
   Bollinger Bands


5. Price averaging: Moving Averages, Ichimoku Overlays


6. Geometric formations: Andrew’s Pitchfork, Gann’s Grid

The following charts are some examples of dynamic price clustering in action

in various markets.

Figure 27.18 depicts dynamic price confluence at Point X, comprising prior

support, a downtrending channel providing support at Point X, and a 100 per-

cent Fibonacci downside projection of the range AB from Point C, on the Daily

EURUSD Chart.

Figure 27.19 depicts price approaching a price‐dynamic and price‐static conflu-

ence comprising prior resistance, Andrew’s Pitchfork median line, and Fibonacci

38.2 percent and 50 percent retracements on the daily Gold chart. Additional bear-

ish evidence is signaled by the cycle‐tuned stochastics being at the overbought level.

fIgure 27.18 Dynamic Price Confluence on the Daily EURUSD Chart.

Source: MetaTrader 4