WHAT IS CONFLUENCE IN FOREX TRADING?
What is CONFLUENCE in Forex Trading?
Alot of people have this question in mind on what is confluence in forex trading.
And why is it so important.
Lets start with the Forex Market.
It is made up of traders (Big or Small) to determine the flow of the market.
For example: if there are more people buying the Bulls than the bears at a period of time. The market will most likely go Bullish. And so forth if it goes bearish.
Therefore, forex trading is about understanding the market sentiments. “Where is the big guys with the big influx of money moving the currency market to?”
And this leads to CONFLUENCE.
For example.
Forex Trader A trades only on Fibonacci signals
Forex Trader B trades only on Moving Average signals
Forex Trader C trades only on Support & Resistance
Forex Trader D trades only on Price action
Forex Trader E trades only on News
Forex Trader F trades only on Divergence
Forex Trader G trades on other indicator signals
Example: Forex Trader A sees a fibonacci signal which is strong and he enters it long. But Forex trader B & C sees their signal and took it short. The market will most likely head short if there are more traders who took it short than long. The bears won the game.
From this example, you can see why Confluence is so important in forex trading and why professional forex traders enter only on confluence.
When we combine all the signals, and if they come together in the same direction. Then there is a very good chance that the market will move your way. Because all the forex traders sees their signal (eg. long) and entered it. Regardless of which signals you see, it shows short.
This shows that, the more trading signals you get on your side of the trade, the higher the chance of winning.
Of course we need not wait until all the above forex signals come together. So long as we have 3-5 signals that comes together. We have gotten ourself a good trade. And if you take these kind of trades continuously, your forex account size is sure to grow.
Remember you heard this First from Asia Forex Mentor, and at our Price Action Course – We teach the full forex trading system and strategies for you to apply in your live forex trading account.
It is Not only about Confluence but is also about how to be a CONSISTENTLY PROFITABLE forex trader.
To an awesome trading as always,
Ezekiel Chew from http://www.asiaforexmentor.com
A complete professional forex trading system that even newbies can apply instantly. Asia Forex Mentor's forex course is now FREE!
Totally new concept for me. It was really helpful.
![[aww]](/themes/default/images/smiles/aww.png)
I had this concept in mind but never knew its name. Trading with the help of more than one indicators will obviously increase success rate.
Originally posted by SashaI had this concept in mind but never knew its name. Trading with the help of more than one indicators will obviously increase success rate.
It is not easy to master more indicators. Traders with few knowledge of indicators cannot implement this concept effectively. So confluence is a good concept but it is hard to use.
Too many indicators on your chart will definately get a trader confused as well. In stead you should rely on simple price actions, common (trader) sense and luck!
Originally posted by ppiToo many indicators on your chart will definately get a trader confused as well. In stead you should rely on simple price actions, common (trader) sense and luck!
For those who rely on PA, there is no need for confluence. But for those who get signals on the basis of indicators, 2 to 3 indicators is a good idea. It is not about using a lot of indicators coz it will be confusing as u said. But 2 to 3 indicators to confirm market trend are good.
The good or ill of a man lies within his own will. – Epictetus
Originally posted by ppiToo many indicators on your chart will definately get a trader confused as well. In stead you should rely on simple price actions, common (trader) sense and luck!
That is best![[grin]](/themes/default/images/smiles/grin.png)
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Originally posted by Champ
Originally posted by Sasha
I had this concept in mind but never knew its name. Trading with the help of more than one indicators will obviously increase success rate.
It is not easy to master more indicators. Traders with few knowledge of indicators cannot implement this concept effectively. So confluence is a good concept but it is hard to use.
Whichever method is used in forex trading, it will not be easy. A successful trading strategy is made after hardwork and a lot of practice. Practice usually takes more than 1 year.
Originally posted by ppiToo many indicators on your chart will definately get a trader confused as well. In stead you should rely on simple price actions, common (trader) sense and luck!
It is almost impossible to win if we rely on luck. PA and common sense r interrelated. But u said it as if it is "very simple". Trading through indicators is always a good start otherwise it will take much more time to understand market movements.
Yeah if there are more order of buy/sell then there are good fluctuation in price and at that time we can grab such a good opportunity to make a good amount of profit and i just love this thing.
Originally posted by randy181992Yeah if there are more order of buy/sell then there are good fluctuation in price and at that time we can grab such a good opportunity to make a good amount of profit and i just love this thing.
I do not mean to target or offend but is this post, in any way, related to confluence?
The good or ill of a man lies within his own will. – Epictetus