On July 27 2022 I posted on social media @AidanFX “ EURJPY is a SELL against 139.52 stop loss. SOLD EURJPY at 139.02 Stop Loss 139.52 Target 138.02“
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 (Purple)
2. Price respects the Support/Resistance Zone (Green Box)
3. Price is trending in a bearish lower low lower high sequence
4. RSI bearish trend continuation divergence forms in the Support/Resistance Zone (Pink)
5. Price respects and remains below Dynamic Support/Resistance 200 Moving Average (Light Blue)
6. Stochastic indicator in overbought levels and also forms a bearish divergence (Dark Blue)
EURJPY 1 Hour Chart July 27 2022
Entered the SELL trade at 139.02 with Stop Loss at 139.52. EURJPY moves lower past the proposed 1:2 RR 138.02 target. On July 28 2022 price continues lower and hits the 1:6 RR target at 136.02 from 139.02 for +300 pips (+6% gain risking 1% on every trade)
EURJPY 1 Hour Chart July 28 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 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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