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The Influence Of A Confluence Of Events To Forecasting Future Price Directions Making For An Increased Percentage Of Winning Trades
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The Influence Of A Confluence Of Events to Forecasting Future Price Directions Making for An Increased Percentage Of Winning Trades

We all know that trading currencies in the forex isn’t always so black and white, and so the more indications you have pointing to the direction of an impending price move the higher the probability that that trade is likely to end up a winner because more traders would be seeing what you’re seeing and would probably be more than willing to take action (either buy, sell or stay flat) confirming or disproving your previous market analysis.

If you have at least 2 different forex trading strategies, and a number of technical indicators you trust all too well plus a couple of fundamental news events agree with the indication of potential future direction of the price of currencies as shown on the charts each one tool complementing the next giving you more confirmation justifying you’re trading bias, you’ll be able to execute trades with much higher conviction, watching the market prove you right only boosts your confidence level in ways you never thought possible.

A Trading opportunity preconfirmed by 3 solid pointers such as the breach of a major .00 psychological level, a significant supply/demand trendline and the formation of exhaustion candles, followed by reversal candles otherwise known as the change of direction candlestick formation is likely to get more follow through than one preconfirmed by only the breach some intraday support or resistance level which might just have been some false break anyways.

Assuming that a Positive MACD Divergence was added to the mix, you’re only going to be all too willing to set stakes on this trade because more and more odds just seem to be popping in your favour and except some disturbing events taunts the minds of traders and changes the entire market psychology, more and more traders will join the buying band wagon pushing prices over the roof so to say.

In case you haven’t noticed yet, before you can even get to have a confluence you have must proven to yourself through practice trading that the individual components of the forex trading strategies you intend to take your trading cue from actually work and you must learn to trust them even when you’re faced with what might seem to be a never ending losing streak.

Building your trading confidence level requires some work on your part because this would involve getting to actually learn how to be in sync with the market rhythmic movements in cycles and understanding how the particular currency pair you wish to trade behaves within different trading sessions and a way to take advantage of this fact.

The Common Problem Most Traders Face with Trading Based on a Confluence of Events

I get asked this question a lot by most newbie and struggling intermediate forex trader;

“How many events do I need to see preconfirming a move on the currency charts before I place a trade?”

My answer to this question always being as many possible confirmations as offered by your trading system as possible.

If you had to go to work and there was some light traffic would you wait for all the stop lights to turn green before you started driving? Of course No! You’ll get moving and keep moving at each stop sign that turns green until you reach your destination which is the office in our example.

This goes the same for trading when you get say for example, a trendline break and a breach of major support/resistance or psychological Number level and a candlestick reversal pattern but no MACD Divergence, it wouldn’t make sense not to trade because there’s no divergence instead you’ll only keep a closer eyes on this trade than on one offered with a MACD Divergence added to the mix.

You’re definitely going to see a lot of improvement when you begin justifying your trading decisions by a confluence of events because you’ll no longer be trading because the stochastic oscillator technical indicator made some squiggle here or there, that is simply trading the indicators and not price action.

Be selective when choosing your trading signals, better trades will always come if you just happened to miss the last one. Until you can know exactly what you’re doing in the currency trading business where you get to the level of being in total control of your actions governed by your forex trading system you’ll not be ready enough to trade a live forex account not even a micro account.

You’ll have to learn forex trading the right way if you want to have a shot at being a successful forex trader a $97 forex trading robot or forex trading system just isn’t going to cut it.

There are some top class quality forex trading courses you’ll find that’ll improve your trading skills with a considerably shortened learning curve. Most traders failing to trade with any amount of consistency to boast about usually do not even know that the forex is a comparisons market. The more you get in tune with the dynamics of supply and demand acting on the perceived values of currencies with commodities indices and future to gauge market sentiment in addition to charting and technical analysis and a host of other factor the sooner you become a better forex trader.

A thorough and in-depth forex trading training and practice on a demo trading account is required to achieve this level of expertise and experience trading the currency market, anything less and you’re simply setting yourself up for failure and the excruciating emotional trauma of watching your money go down the drain.

Hope you enjoyed reading this article, don’t forget to drop your comments and questions and also share it with your friends. Cheers…


Street Talk

Hi Coach, nice article on Forex. And thanks for following me too !

Reply
  about 8 years ago
  

Am glad you enjoyed the article. i also look forward to reading yours. Have a nice day :)

Reply
  about 8 years ago
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