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WHAT IS CONFLUENCE IN FOREX TRADING?


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What is CONFLUENCE in Forex Trading?

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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

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Forex can impose greater threat of losing capital if a trader can’t ensure proper analysis. Again, dispersion of investment returns is making proper analysis an essential to achieve success. Thereby the usages of various technical indicators have been increased in the current days. However, confluence will occur when numerous technical indicators provide the same trade signal to a trader and it will principally lead to better accurateness and effective trade execution decisions here.

 

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A demo account can be used to start trading and understand about forex trading before using a real account. And indeed the evaluation will help you to further improve your trading skills. What we have learned on a demo account will be very useful for stock in a real account

 

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