On November 23 2021 I posted on social media @AidanFX “USDCAD can still make another push higher as long price stays above 1.2610. Watch for buying opportunities. Bought USDCAD @ 1.2677 SL @ 1.2627 TP @ 1.2727 – 1.2752 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 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.
USDCAD 1 Hour Chart November 26 2021
BUY Trade Setup
1. Price enters Support/Resistance Zone (Blue)
2. Price respects Dynamic Resistance 200 Moving Average (Black)
3. Momentum Indicator Trend Reversal Divergence (Pink)
Entered the BUY trade at 1.2677 with Stop Loss at 1.2627 and Targets at the 1:2 RR area. On November 26 2021 USDCAD moves higher and hits the 1:2 RR target at 1.2777 from 1.2677 for +100 pips (+2% gain risking 1% on every trade).
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 USDCAD 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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