Confluence Zone: A support & resistance level that represents a key “point of price instability” where important bullish/bearish battles are anticipated to take place.
Each day before European session gets going between we send our members our confluence zones for
the upcoming trading session. These are zones that we anticipate will be points of price instability. It is near or within these price ranges that we watch for a trade setup via technical pattern & candlestick confirmations.
Our trading signals are not just blind instructions with no rational, instead our members know which price zones we will be watching and what type of setups to look for. Our ultimate signals are price pattern confirmations and RSI/Stochastic based. Once a trade setup emerges within the daily confluence zone, then a live signal is sent out.
We anticipate the daily confluence zones with trend lines, pivot points/zones, previous support/resistance, high/lows and key Fibonacci levels. Our short to mid-term bias is based on positioning data, rolling pivot zones, and some light technical analysis.
It is important to learn how to trade points of price instabilities, that is true regardless if your doing your own analysis or following the analysis of another. Different trade setups can have much different risk/reward possibilities… unstable price points often only need a small stop-loss to negate or confirm and thus they make sense to use along the strategy of “cutting losses short and letting winners run”.
However this strategy requires patience and a clear understanding of position sizing. Most forex traders take little thought of choosing their position size in a logical way. The way to trade points of price instabilities is to adjust your position size based on stop-loss distance before every trade. In real trading it is easy to have a very high pip count and yet still realize negative real profits, and thus pip count alone is a VERY poor performance metric!
By combining trading points of price instabilities along with consistent position sizing you have the ability to carry a large quantity of lots while still keeping a prudent risk level on each trade. An obvious ideal on a winning trade is to carry as much lots as possible for as long as possible while still keeping risk conservative. A clear way to try and do this is to trade unstable price points while also adjusting your position size, on profitable trades you can skim some profits while letting the main position run.
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