On November 9 2021 I posted on social media @AidanFX “ GBPCAD can push lower towards 1.6810 area. Watch for possible selling opportunities. “
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 charts below show a confluence trade setup that signals a trader on which side to take the trade.
GBPCAD 1 Hour Chart November 9 2021
SELL Trade Setup
1. Termination of Elliott Wave blue (a) (b) (c) correction and black wave ((iv)) signalling a move lower to complete black wave ((v))
2. Price enters Support/Resistance Zone (Light Blue)
3. Price respects Dynamic Resistance 200 Moving Average (Dark Blue)
4. RSI Bearish Trend Reversal Divergence (Black)
5. Possible Head and Shoulders Bearish Pattern (Purple)
Entered the SELL trade at 1.6875 with Stop Loss at 1.6915 and Targets at the 1:3 to 1:4 RR area. On November 10 2021 GBPCAD moves lower. Price does not hit the 1:4 RR target but manages to hit 1:3 RR / 1:3.5 RR target and makes a new swing low to complete the black wave ((v)).
GBPCAD 1 Hour Chart November 10 2021
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 GBPCAD 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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