Confluence trading is a combination of one 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, Candlestick patterns etc.), price action (Support & Resistance, Supply & Demand Zones, Fibonacci retracements etc.) and indicators (RSI, Moving Average, Stochastic etc.) are technical analysis strategies used when trading a confluence setup.
On October 18 2021 I posted on social media @AidanFX “LONG AUDUSD, SHORT USDCAD , EURAUD“
AUDUSD 1 Hour Chart October 18 2021
1. Support/Resistance Zone (Blue)
2. RSI Bullish Trend Continuation Divergence (Black)
3. Dynamic Support 200 MA (Pink)
Entered the BUY trade at 0.7400 with Stop Loss at 0.7378 and Targets at the 1:1 RR minimum with full target at the 1:2 RR. AUDUSD moves higher and on October 19 2021 price hits 1:3 RR target at 0.7466 from 0.7400 for +66 pips (+3%).
USDCAD 1 Hour Chart October 18 2021
1. Bearish AB=CD Pattern (Light blue)
2. RSI Bearish Trend Continuation Divergence (Pink)
3. Dynamic Resistance 50 MA (Dark blue)
4. Termination of wave (iv) correction (Black)
5. Stochastic (Overbought)
Entered the SELL trade at 1.2373 with Stop Loss at 1.2410 and Targets at the 1:1 RR minimum with full target at the 1:1.5 RR. USDCAD moves lower and on October 19 2021 price hits 1:1.5 RR target at 1.2318 from 1.2373 for +55 pips (+1.5%).
EURAUD 1 Hour Chart October 18 2021
1. Supply Zone (Light blue)
2. RSI Bearish Trend Continuation Divergence (Black)
3. Dynamic Resistance 200 MA (Purple)
Entered the SELL trade at 1.5650 with Stop Loss at 1.5718 and Targets at the 1:1 RR minimum with full target at the 1:1.5 RR. EURAUD moves lower and on October 19 2021 price hits 1:1.5 RR target at 1.5548 from 1.5650 for +102 pips (+1.5%).
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 @AidanFX you too could have caught the AUDUSD move higher and the USDCAD, EURAUD 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
At Elliottwave-Forecast we cover 78 instruments (Forex, Commodities, Indices, Cryptos, Stocks and ETFs) in 4 different time frames and we offer 5 Live Session Webinars everyday. We do Daily Technical Videos, Elliott Wave Trade Setup Videos and we have a 24 Hour Chat Room. Our clients are always in the loop for the next market move.
Try Elliottwave-Forecast for 14 days !!! Just click here –> 14 day trialBack