On September 21 2022 I posted on social media @AidanFX “ SOLD EURJPY at 143.45 Stop Loss at 144.05 TP 142.55 (1:1.5 RR) 142.25 (1:2 RR)“
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. Bearish Harmonic AB=CD Pattern triggers SELLS (Red)
2. Price respects the Supply Zone/Sell Zone (Light Blue)
3. RSI bearish divergence forms in the Supply Zone/Sell Zone (Gold)
4. RSI breaks below 50 level signalling more downside
EURJPY 1 Hour Chart September 21 2022
Entered the SELL trade at 143.45 with Stop Loss at 144.05. EURJPY moved lower to the proposed 1:2 RR 142.25 target for +120 pips (+2% gain risking 1% on every trade)
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 EURJPY 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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