WHAT IS CONFLUENCE IN FOREX TRADING?

Discussion in 'Forex Education' started by asiaforexmentor1, Jan 11, 2012.

  1. asiaforexmentor1

    asiaforexmentor1 Banned

    81
    0
    0
    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
     
  2. PaladinFX

    PaladinFX Active Trader

    76
    0
    27
    Well, since this (ex-)member has been banned and hence won't feel offended, I feel free to say:

    This is a load of bull!


    One can only hope that the other 32 posts he made are either of better quality or as trivial (not to call it vacuous) as this one, so that new traders, who are often impressed by big words like 'Confluence', will not be tempted to read too much into them.


    P.
     
  3. Easy Trader

    Easy Trader Master Trader

    240
    4
    59
    Confluence is the most powerful thing in trading. Its the ability to correctly see where
    the order flow exist and when it is in line with your bias. Trading with out it is like driving at night with your headlights off......for the record I wasn't keen on the original poster either.
     
  4. PaladinFX

    PaladinFX Active Trader

    76
    0
    27
    Yes, confluence can be a useful and powerful tool.

    The definition of the OP is total rubbish though ... confluence of different analysis methods is a thing traders can use for themselves ('internal', so to say) ... it is most assuredly NOT something major players can use to determine other people's entry/exit points.

    And the example with traders 'A' to 'G' shows just the opposite of confluence.


    Cheers,
    P.
     
  5. triplet

    triplet Active Trader

    101
    2
    27
    Trading confluence involves the trader combining various technical analysis tools to know if a trader will be successful or not. It can be profitable but it requires patience.
     
  6. Ary Barroso

    Ary Barroso Active Trader

    418
    9
    29
    For me the confluence is; when I get same direction from my technical aspect and the fundamental as well! Only then I take 3% risk reward ratio in my trading (that is the maximum RRR in my trading)! Otherwise, I use only 1% risk ratio in my trading.
     

Share This Page