On July 5 2022 I posted on social media @AidanFX “ AUDCAD : Watch for selling opportunities in the 0.8880 area against 0.8920 stop loss. Pending AUDCAD SELL Limit 0.8880 Stop Loss 0.8920 Target 1 0.8800 (1:2RR) Target 2 0.8760 (1:3RR)“
Confluence trading is a combination of two or more trading strategies/techniques that come together and form a high probability buy/sell zone in a certain area in the market. Market patterns (Elliott Waves, Harmonic, Head and Shoulders etc.), price action analysis (Support & Resistance, Supply & Demand Zones, Candlestick analysis etc.) and indicators (RSI, Moving Average, Stochastic etc.) are technical strategies/techniques used when trading a confluence setup. The charts below show a confluence trade setup that signals a trader on which side to take the trade.
SELL Trade Setup
1. Bearish Harmonic Pattern point D XA 0.786 triggers SELLS (Blue)
2. Price entered the SELL ZONE/Liquidity Zone/Supply Zone (Green Box)
3. Bearish lower low lower high sequence
4. Bearish trend continuation divergence forms in the SELL/Supply ZONE (Pink)
5. Price respects and remains below Dynamic Support/Resistance 50 Moving Average (Purple)
6. Price respecting Support/Resistance level (Red)
7. Stochastic indicator in overbought levels (Light Blue)
8. RSI indicator will confirm bearish momentum on the cross below the 50 level
AUDCAD 4 Hour Chart July 8 2022
Entered the SELL trade at 0.8880 with Stop Loss at 0.8920. AUDCAD moves lower and on July 11 2022 price hits the proposed 1:3 RR target at 0.8760 from 0.8880 for +120 pips (+3% gain risking 1% on every trade)
AUDCAD 4 Hour Chart July 11 2022
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup. If you followed me on social media you too could have caught the AUDCAD move lower. We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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