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How to Develop a Forex trading plan  –  Trading Confluence; one of the most effective methods to trade forex with high probability.

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Video Synopsis -How to develop a forex trading plan – trading confluence 5-29-2009

In the above forex education video I introduce traders to the concept of forex trading using confluence.

Confluence is simply an area where two factors meet and confirm one another; it’s the “weight of evidence” argument. Confluence = an area on a chart where 2 or more trading signals come together at a common point.

When we have a horizontal line on a chart and an uptrend line or a moving average, and the two meet at the same point, this would be an example of confluence.

The beautiful thing is when we are trading we can put into our trading plan conditions that must be met for confluence. Condition 1, do we have confluence of two factors to support the direction we are trading? An example of this would be a moving average cross over to the upside and an uptrend line that aligns at the same point as a moving average, if we then buy a pullback, or go long on weakness in the uptrend at this intersection point of signals, we are then trading at confluence.

A practical example from the video above: Crossover of moving averages to the upside = momentum to upside, also look at the horizontal line, the area where the horizontal line and MA meet is confluence. The 3rd variable is the price action confirmation signal, in his video the price action signal was a pin bar. This is called 3 variable confluence and it’s a very high probability way to trade the forex market.

Entering at “confluence” is the most important factor of any forex trading strategy.

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 15,000+ students since 2008.
Checkout Nial’s Professional Forex Course here.

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11 Comments

  1. rajesh vishwakarma says:

    Nice video on good feedback as well..thanks

  2. pitborirak says:

    very good, clear, and understanding.

  3. Sheila says:

    Great video Nial, thanks for sharing your abundant knowledge.

  4. Ellis Russell says:

    This is awesome!

  5. George says:

    Thanks Nial.

  6. Larry Hoover says:

    Hi Nial,

    Given the importance of Confuluence could you provide us with more details (videos or written materials) on same?
    THX Larry

  7. bob morley says:

    I know you are pro-price action and I am learning to think that way as well. I fully believe that price can do anything it wants WITHOUT the permission of RSI or Stoch or CCI etc.

    BUT

    Don’t you think Ichimoku has many of these confluences built in? I have been putting a lot of weight on where price is in relation to the cloud for a filter and trying to trade only with price action in that direction. Price action rather than line crosses being my trigger.

    1. nial says:

      I like the idea of confluence in any trading method, its the simply the idea of using multiple reasons to enter a trade which align together to give one common trading signal.

  8. anand devkota says:

    Thank you sir

  9. tom power says:

    however what is frightening about this point is that there was a doji (narrow range open=close) bar after an uptrend a sure reversal yet it pulled back and kept going

    1. nial says:

      You have traditional candlestick patterns confused with my methods. This is not a doji in my eyes, its a pin bar bullish reversal. Lower prices where clearly rejected. A doji is not valid if it forms in this vecinity of the chart anyway.
      Please check out my course for more clarification.

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