On January 5 2022 I posted on social media @AidanFX “ EURJPY watch for a move higher towards the 131.50 area. Watch for buying opportunities as long price stays above 130.83.“
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 Formations etc.) and indicators (RSI, Moving Average, Stochastic etc.) are technical strategies/techniques used when trading a confluence setup. The chart below shows a confluence trade setup that signals a trader on which side to take the trade.
EURJPY 30 Minute Chart January 5 2022
BUY Trade Setup
1. Price enters and bounces off Support/Resistance Zone (Turquoise Box)
2. Price respects Dynamic Resistance 50 Moving Average (Blue)
3. RSI Indicator Trend Reversal Divergence (Black)
4. RSI BUY trigger above the 50 level
Entered the BUY trade at 131.03 with Stop Loss at 130.83 and Targets at the 131.50 area. On January 5 2022 EURJPY moves higher and hits the 1:2.5 RR target at 131.53 from 131.03 for +50 pips (+2.5% gain risking 1% on every trade).
EURJPY 30 Minute Chart January 5 2022
A trader should always have multiple strategies all lined up before entering a trade. Never trade off 1 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 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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