Since September 2022 EURUSD has bounced higher and has been trending to the upside making higher highs and higher lows. We at EWF always encourage our members to trade with the trend and not against it.
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. Structure is in a higher high / higher low sequence from the September 2022 lows low signalling upside momentum.
2. Bullish Elliott Wave count calling for more upside.
3. In a 4 Hour Demand Zone signalling for a bounce higher. (Blue Box)
EURUSD 1 Hour Chart January 19 2023 Asia Update (Bullish Elliott Wave Count)
BUY trade entered January 19 2023 at 1.0793 with Stop Loss at 1.0780 looking for move higher to the minimum 1:7 RR 1.0884 target and maximum 1:10 RR target at 1.0923.
EURUSD 1 Hour Chart January 19 2023
EURUSD 1 Hour Chart January 22 2023
The pair moves higher and on January 22 2023 EURUSD hits the target at 1.0897 from 1.0793 entry for a +104 pip move and a 1:8 Risk/Reward winning trade. Eventually the pair later continued higher to tag the 1:10 RR maximum target level but I was happy to close out and take profit at the 1:8 RR target level.
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. 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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