On June 6 2022 I posted on social media @AidanFX “ EURAUD : I will be watching the 1.4890 area for possible selling opportunities against 1.4920 stop loss and targeting the 1.4790-1.4760 area.“
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. Price broke the higher high higher low sequence signalling a trend reversal lower. BOS=Break of Structure (Blue)
2. Price makes a low and retraces back to the SELL ZONE/Liquidity Zone/Supply Zone (Red)
3. Bearish AB=CD pattern visible in the SELL ZONE (Green)
4. Bearish Harmonic Pattern point D XA 1.618 termination visible in the SELL ZONE (Purple)
5. Bearish trend reversal divergence forms on price and MACD indicator (Light Blue)
EURAUD 15 Minute Chart June 6 2022
Entered the SELL trade at 1.4891 June 6 2022 with Stop Loss at 1.4921 and Target Minimum at 1.4831 (1:2 RR). EURAUD moves lower and on June 7 2022 price hits the proposed 1:4 RR target at 1.4771 from 1.4891 for +120 pips (+4% gain risking 1% on every trade)
EURAUD 15 Minute Chart June 7 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 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
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