Trading Forex Price Action from Confluent levels
February 1st, 2010
To conclude, price action is one of the most profitable yet simple ways to trade the forex market. Reversal bars such as the pin bar or shooting star are great entry techniques and can also be used as exit signals. Inside bar techniques work great in strongly trending markets as continuation signals. T
Price Action Confluence in Forex
No matter what method you use to trade the forex market, one thing is for sure, trading from a confluent level will greatly increase your odds of profiting. Price action setups traded from confluent levels is one of the highest probability trading methods you will find. Price action analysis makes use of a raw price chart with virtually no indicators. To find the most confluent signals we look for areas where price action signals coincide with support or resistance, trend lines, (and) or Fibonacci retracement areas.
Waiting for our price action setups to occur at confluent levels is the most accurate way to trade forex. When we trade forex in this manner we are acting like snipers; patiently waiting for the target to move into our crosshairs and then calmly pulling the trigger to execute our trade. In this way we greatly increase our winning percentage and more quickly grow our trading account. This is in direct contrast to the way many aspiring forex traders behave; overtrading and randomly entering and exiting trades after their self-discipline falters due to an ineffective method (and) or a lack of self-control. We could compare most traders to a person blindly shooting their bullets in a panic, not hitting the target and then being totally out of ammo when the perfect setup eventually forms.
The necessity of a simple yet effective strategy to navigate the turbulent forex market cannot be overstated. When we combine a truly simple yet effective method like price action analysis with confluence of levels we get a deadly combo. The patience needed to wait for a well defined price action setup to occur at a strong confluent level is a rare quality indeed. Price action analysis can give you the method that will allow you to profit if you have the necessary self-discipline to not over trade and effectively manage your risk. It pays to get a quality education in the art of price action analysis, once you become trained in this trading method you can start to design your own trading plan that utilizes confluent levels to increase the probability of each setup.
Confluence of levels will enhance the effectiveness of any trading method, the problem is most trading methods make use of lagging indicators or ridiculous counting methods that only do more to confuse and frustrate forex traders than to assist them. Price action analysis is the most effective method that makes use of a plain naked price chart. The reason is that you are trading off the data the market provides about itself. There are many easily spotted clues to future market direction that are readily apparent to the person trained to spot specific price pattern setups. Support and resistance, Fibonacci retracements, and trend lines can be utilized to trade the forex market without any further method involved. However, combining these levels with price action is the closest thing to a perfect forex trading technique that you will find. The natural rotational movement of the forex market is best unveiled by price action signals formed at confluent levels.
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