CONFLUENCE TRADING

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Confluence: A point in the market where two or more levels intersect each other, thus forming a ‘hot point’ or confluent point in the market. In the dictionary, confluence means ‘a coming together of people or things; concourse’ (this the picture above showing two rivers coming together). So, basically, when we look for confluent areas in the market we are looking for areas where two or more levels or analysis tools are intersecting.

Price action: Price action is the movement of the price of a market over a specific period of time. By learning to read the price action of a market, we can determine a market’s directional bias as well as trade from reoccurring price patterns or price action setups that reflect changes or continuations in market sentiment

The factor of Confluence is essential to Long term successful trading. Confluence gives weight to a trading setup. As a Price Action trader, a setup is deemed to be high probability entry if the element of confluence is painfully obvious.

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