Confluence trade” is when you combine more than one trading technique or analysis to increase your odds of a winning trade. Use multiple trading indicators that give the same “reading” as a way to confirm the validity of a potential buy or sell signal.
Think of confluence as a combination of commercial methods when one technique validates the other and you get the perfect trade when you combine them. That’s why the confluence of terms it is derived from the concept of merging two methods or a place where two rivers meet.
Examples of confluence trading techniques
1. Trade confluence with two technical analysis indicators
2. Chart patterns and Fibonacci retracement levels
3. Combination of basic and technical analysis
Remember that trading is a broad field; you can’t rely on one particular tool for success. Instead, you need to develop your combo and master your price action confluence trading strategy. Finally, you can even learn to identify confluences naturally on a price chart when applying the naked trading strategy. And finding confluences to validate your trades can ultimately help you achieve that goal and become a better trader. Also do your due diligence, test the strategy with demo and risk management. See you soon!