And if you take these kind of trades continuously, your forex account size is sure to grow. Phone Number Please fill out this field. You broaded my forex mindset! Take a free trading course with IG Academy Our interactive online courses help you develop the skills of trading from the ground up. The best way to avoid falling into this trap is to stay patient and always second guess your work. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Of course, there are never any guarantees.
DEFINITION of 'Confluence' Confluence is the combination of multiple strategies and ideas into one complete strategy. Confluence occurs when two separate ideas/strategies are used together to form an investment strategy that is in line with an investor's risk profile and goals.
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Last but not least we notice that the tail of this bullish pin bar intersects with our 10 and 20 exponential moving averages that we use as part of our trading strategy. So it appears our moving averages are also providing dynamic support in combination with the key support level.
You get the idea. The list could go on and on and the factors you identify will vary depending on your style of trading. However the point to take away from all of this is that the more Confluence Factors we have on any given setup, the better the odds are that the setup will move in the intended direction.
This works both ways, however. Just as a trade setup with more factors can be thought of as higher quality, a setup with fewer factors is of lesser quality. This is when patience is so important — to have the ability to wait for the trade setup which has four or five factors instead of taking the setup that has just two or three factors.
Instead you want to focus on the bigger picture. Becoming a profitable Forex trader is a marathon, not a sprint. Just as a casino doesn't expect to win every hand, you shouldn't expect to win every trade no matter how many Confluence Factors are present.
Having said that, the casino knows that by the end of the year it will have made a sizable profit because the odds are stacked in their favor. So start thinking like the casino and begin using confluence to stack the odds in your favor. If you want to get news of the most recent updates to our guides or anything else related to Forex trading, you can subscribe to our monthly newsletter. Please disable AdBlock or whitelist EarnForex. Putting the Odds in Your Favor I think I can be so bold as to say that consistent profits is the goal of every serious Forex trader.
So Confluence Factor 1 becomes a strong uptrend. He has a monthly readership of , traders and has taught over 20, students. Video Synopsis -How to develop a forex trading plan — trading confluence In the above forex education video I introduce traders to the concept of forex trading using confluence. When we have a horizontal line on a chart and an uptrend line or a moving average, and the two meet at the same point, this would be an example of confluence.
The beautiful thing is when we are trading we can put into our trading plan conditions that must be met for confluence. Condition 1, do we have confluence of two factors to support the direction we are trading? An example of this would be a moving average cross over to the upside and an uptrend line that aligns at the same point as a moving average, if we then buy a pullback, or go long on weakness in the uptrend at this intersection point of signals, we are then trading at confluence.
A practical example from the video above: The 3rd variable is the price action confirmation signal, in his video the price action signal was a pin bar.
Given the importance of Confuluence could you provide us with more details videos or written materials on same? I know you are pro-price action and I am learning to think that way as well. I have been putting a lot of weight on where price is in relation to the cloud for a filter and trying to trade only with price action in that direction. Price action rather than line crosses being my trigger. I like the idea of confluence in any trading method, its the simply the idea of using multiple reasons to enter a trade which align together to give one common trading signal.
You have traditional candlestick patterns confused with my methods. This is not a doji in my eyes, its a pin bar bullish reversal. Lower prices where clearly rejected. A doji is not valid if it forms in this vecinity of the chart anyway. Please check out my course for more clarification.
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Definition Confluence occurs when several technical indicators give the same trade signal. Confluence of trade signals could lead to greater accuracy and profitability. Confluence Trading Definition. When you have two or more levels come together at a certain point on your chart, that’s confluence. Confluence trading is the same kind of situation when two different rivers meet. Examples in forex trading can be any of these: It can be a a trendline coming together at at % or 50% fibonacci level. Trading Forex With Confluence and Price Action - If I had to boil down my Forex trading strategy into to one simple phrase, it would be this; trading simple price action signals from confluent levels in the market.