What is confluence & how does it work?

Technical analysts are known to use the concept of confluence to identify and support technical trading through the use of multiple signals or indicators comprehensively. Confluence allows an investment adviser to combine multiple investment strategies into one portfolio that holistically represents the risk profile and goals of a client.

What is confluence trading?

That is why the term confluence is derived from the concept of merging two methods or a place where two rivers meet. So, in simple terms, the confluence trading definition refers to a merger of two or more techniques to create multiple trade signals lining up on your price charts. Now, coming back to trading.

Why is confluence important in forex trading?

In the forex market, trading with confluence allows for greater confidence in decision-making, as it provides traders with multiple points of evidence to support their trade ideas. It significantly reduces the chances of entering a trade based on false or weak signals, which could lead to losses.