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Start off with the 1-ball  at the front of the rack. Place all the other balls at random. Line the apex (the first ball) up with the middle diamond on the side of the pool table.
This is also called the "apex" of the rack. Make sure the 1-ball is at the apex, the 8-ball is in the middle of the rack, and both a stripe and solid are at the bottom corner, but line up all the other balls in random fashion. If solids and solids are together, or stripes and stripes, that's okay.  One variant of this step in amateur play is to vary the edges of the rack so that the pattern is stripe, solid, stripe, solid, etc. This will result in the two corner balls being the same, i.e. either both stripe or both solid. Another variant of this step in amateur play is to order the balls down and from left to right, according to their number. This will always result in the 1-ball being at the apex, the 11 and 15 being at the bottom corners, and the 5-ball being in the 8's customary position. The center of the first ball should be in the middle of the table at one quarter of the length.  Some tables have this spot marked with a small dot.