On September 5 2022 I posted on social media @AidanFX “ EURAUD BUY at 1.4603 Stop Loss 1.4563 TP 1.4683 (1:2RR) 1.4723 (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.
BUY Trade Setup
1. RSI bullish trend continuation divergence forms on the 4 hour chart (Pink)
2. Price is on a higher high higher low sequence on the 4 hour chart
3. Stochastic indicator is in oversold area on the 4 hour chart
4. Price breaks bearish sequence and flips to a bullish bias on the 15 minute chart (Blue lines)
5. Price taps the Demand Zone/BUY Zone and reacts with bounce higher on the 15 minute chart (Purple)
EURAUD 4 Hour Chart September 5 2022
EURAUD 15 Minute Chart September 5 2022
Entered the BUY trade at 1.4603 with Stop Loss at 1.4563 EURAUD moves higher to the proposed 1:3 RR 1.4723 target for +120 pips +3% gain.
Risking 1% on every trade (Example: Risk $100 on $10,000 or risk $1000 on $100,000)
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 higher. 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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