On July 11 2022 I posted on social media @AidanFX “ USDCAD : Will be watching the 1.2968 – 1.2934 area for possible buying opportunities.“
The chart below was also posted on July 13 2022 showing the BUY trade setup.
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, Trend Sequences etc.) and technical indicators (RSI, Moving Average, Stochastic etc.) are all 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. Price broke the July 5 2022 bearish market structure signalling a possible reversal higher (Red Line)
2. The pair is in a higher high higher low sequence on the Daily timeframe since June 1 2021
3. Price entered the 4 Hour and 1 Hour Demand Zone/BUY Zone (Purple and Light Blue)
4. RSI indicator cross above the 40 level will add more bullish confirmation
USDCAD 4 Hour Chart July 13 2022
Entered the BUY trade at 1.2952 with a tight Stop Loss at 1.2932. USDCAD moves higher and on July 14 2022 price hits the proposed 1:7 RR target at 1.3092 from 1.2952 for +140 pips (+7% gain risking 1% on every trade)
USDCAD 4 Hour Chart July 14 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 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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