The chart above shows a simple example of how trading with confluence can lead us to identify setups with more than a high success rate. As you can see in the chart, there are three factors of confluence that support our decision.
1. The first factor is the fibonacci retracement, which is a powerful tool to find strong support and resistance levels in the direction of the trend. Don’t ever try to buy a market in a downtrend. Most successful traders say “the trend is your friend” and this is exactly what I teach in Candlestick Profits.
2. The second factor is the supply/demand level, the market stalled and then made a strong price move from this level at the left of the chart. This area is the best place for you to wait for a price action signal to form.
3. The third factor is the candlestick buy signal setup that forms after the retracement back to the support level. It indicates that the retracement phase is over, and that the beginning of an impulse move is going to happen.
If you think in terms of confluence as I teach in Candlestick Profits you will develop a winning trading mindset, and your brain will get used to identifying only high-probability setups that lead to big profits.
Your entry is going to be close of the candlestick pattern.
Your stop loss is going to be placed under the tail of the candlestick pattern.
The profit target is found using one of many profitable techniques I show in the book. Easy, right?