Confluence trading” is when you combine more than one trading technique or analysis to increase your odds of a winning trade. You use multiple trading indicators that all give the same “reading”, as a way to confirm the validity of a potential buy or sell signal.
Think about confluence as a combination of trading methods when one technique validates the other, and you get the perfect trade when you combine them. That is why the term confluence is derived from the concept of merging two methods or a place where two rivers meet.
Examples of Confluence Trading Techniques
1. Confluence Trading with Two Technical Analysis Indicators
2. Chart Patterns and Fibonacci Retracement Levels
3. Combining Fundamental and Technical Analysis
Remember that trading is a broad field; you can’t rely on one particular tool to succeed. Instead, you have to develop your combo and master your price action confluence trading strategy. Eventually, you might even learn to identify confluences naturally on a price chart when you apply the naked trading strategy. And finding confluences to validate your trades can ultimately help you achieve this goal and become a better trader.So do your due diligence, test strategy with demo and risk management.see you soon!