On May 6 2022 I posted on social media “GBPUSD SOLD @ 1.2340 Stop Loss 1.2380 Target 1.2280 – 1.2260 area.“
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. RSI indicator Bearish Trend Continuation Divergence (Purple)
2. Price is respecting the Dynamic Support 50 MA signalling more downside (Light Blue)
3. Stochastic indicator at overbought levels
4. RSI indicator crosses below the 50 level signalling bearish momentum and triggers SELL
GBPUSD 30 Minute Chart May 6 2022
Entered the SELL trade at 1.2340 with Stop Loss at 1.2380 and Target Minimum at 1.2280 (1:1.5 RR). GBPUSD moves lower and on May 9 2022 price hits the proposed 1:2 RR target at 1.2260 from 1.2340 for +80 pips (+2% gain risking 1% on every trade).
GBPUSD 30 Minute Chart May 9 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 GBPUSD 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
At Elliottwave-Forecast we cover 78 instruments (Forex, Commodities, Indices, Cryptos, Stocks and ETFs) in 4 different time frames and we offer 5 Live Session Webinars everyday. We do Daily Technical Videos, Elliott Wave Trade Setup Videos and we have a 24 Hour Chat Room. Our clients are always in the loop for the next market move.
Try Elliottwave-Forecast for 14 days !!! Just click here –> 14 day trialBack