On February 17 2022 I posted on social media @AidanFX “ SHORT EURCAD at 1.4433 Stop Loss at 1.4503 Target 1.4363 – 1.4328 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. RSI Indicator Bearish Trend Continuation Divergence (Red)
2. Price respects the Dynamic Support 200 MA signalling more downside (Black)
3. Stochastic Indicator in overbought levels
4. Price respects Static Support/Resistance Level (Blue)
5. RSI Indicator below 50 level signalling bearish momentum and triggers SELL
EURCAD 1 Hour Chart February 17 2022
Entered the SELL trade at 1.4433 with Stop Loss at 1.4503 and Targets at the 1:2 RR level. EURCAD moves lower and on February 24 2022 price hits the proposed 1:2 RR target at 1.4293 from 1.4433 for +140 pips (+2% gain risking 1% on every trade)
EURCAD 1 Hour Chart February 24 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 EURCAD 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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