There were several patterns that signalled the USDCHF pair would move lower on December the 7th and the 22nd of 2021. 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.
USDCHF 4 Hour Chart December 7 2021
USDCHF 4 Hour Chart December 22 2021
SELL Trade Setup
1. Bearish harmonic pattern triggered sellers at the BC 0.50% Fib. retracement level (Blue)
2. Bearish AB=CD pattern triggered sellers at the equal legs level (Green)
3. Bearish Trend Reversal Divergence on price and RSI indicator (Black)
Entered the SELL trade at 0.9232 with Stop Loss at 0.9297 and Targets at the 1:1 RR minimum with full target at the 1:3 RR. USDCHF moves lower and on December 31 2021 price hits 1:2 RR target at 0.9102 from 0.9232 for +130 pips (+2% gain risking 1% on every trade)
USDCHF 4 Hour Chart December 31 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 USDCHF 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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