On April 6 2022 there were several market patterns that signalled the AUDJPY pair would move higher. 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.
AUDJPY 1 Hour Chart April 6 2022
AUDJPY 1 Hour Chart April 14 2022
BUY Trade Setup
1. Bullish Harmonic pattern triggered buyers at the BC 0.50% Fib. retracement level (Red)
2. Price finds support on the Dynamic Support/Resistance 200MA (Blue)
3. Bullish Trend Continuation Divergence forms at the BC 0.50% and Dynamic Support 200MA area (Pink & Green Circles on price chart and RSI indicator)
Entered the BUY trade at 92.45 with Stop Loss at 90.75 and Target at the 1:1.5 RR. AUDJPY moves higher and on April 19 2022 price hits 1:1.5 RR target at 95.00 from 92.45 for +255 pips (+1.5% gain risking 1% on every trade)
AUDJPY 1 Hour Chart April 19 2022
A trader should always have multiple strategies all lined up before entering a trade. Never trade off 1 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 USDCHF 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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