Once again is my pleasure to partake in this class and as the assessment where my dear professor taught us on Confluence Trading.
1.EXPLAIN CONFLUENCE TRADING. EXPLAIN HOW A TRADE SETUP CAN BE ENHANCED USING CONFLUENCE TRADING.
2.EXPLAIN THE IMPORTANCE OF CONFLUENCE TRADING IN THE CRYPTO MARKET?
3.EXPLAIN 2-LEVEL AND 3-LEVEL CONFIRMATION CONFLUENCE TRADING USING ANY CRYPTO CHART.
4.ANALYZE AND OPEN A DEMO TRADE ON TWO CRYPTO ASSET PAIRS USING CONFLUENCE TRADING. THE FOLLOWING ARE EXPECTED IN THIS QUESTION.
A) IDENTIFY THE TREND.
B) EXPLAIN THE STRATEGIES/TRADING TOOLS FOR YOUR CONFLUENCE.
C) WHAT ARE THE DIFFERENT SIGNALS OBSERVED ON THE CHART?
Therefore the word 'Confluence' actually means coming or flowing together, meeting, or gathering at one point therefore with this I can now say that the confluence trading is the combination and flowing together of different strategy which tend to specific, in clearing a signal, hence this actually happened to be technically in incline in terms of examination of the chart Meanwhile is used by the analyst or traders in monitoring the situation of the market. As regards to confluence trading it means that as a trader you need to combine more than one signal in order to be clear with your signal which as well tells you the price action in the market.
Meanwhile, using the strategy can also be dangerous if it is not properly managed since the world of crypto currency is highly volatile which may retrace against your initial plan on the market, hence this is necessary to use more than 1 strategy to get the full understanding of the market actions, hence this is known as the confluence trading.
Therefore to enhance a trade using the confluence trading what u have to do is use different tool in trading chart, hence this serves as a substitute which may be the indicator or pattern which should be more than one. Therefore, some considerations should be noted, like having all the strategy, indicator and pattern should be in the same alignment with one another, aside from that the trader has to be patient while monitoring the market before making any decision.
Therefore keeping and obeying the lay down rules being said here will properly enhance the confluence in trading.
Examining the AION/USDT chart under 30 Minutes is clearly identified that the confluence trade was abducted on this particular chart using the BOLLINGER, RSI, and MACD indicators.
As you can see on the chart all the indicators are all in alignment with the trends forming the confluence trading.
Here are some of the highlight based on the importance of confluence trading.
•The confluence trading prevents a trader from falling a victim of fake market retracement and as well the reversal and fake out on signal meanwhile all this mention is controlled and avoided while using the confluence trading.
•Using the confluence trading helps in identifying a good and outstanding trading set up, meanwhile this gives you positioning in market entry and exists.
•The confluence eliminates the doubts and reduces fear and anxiety while trading, hence it gives you the courage, confidence and excitement.
• Using the confluence trade tells you what the nearest future holds for the market, which create awareness to decide when to exit and enter into the market.
•The confluence trade increases the odds of gaining over the odds of losing, thereby giving proper risk management.
2-LEVEL CONFIRMATION CONFLUENCE TRADING
This actually means using two different tools in monitoring and picking out trade signals for perfect entry and exit. Hence this is achieved by using market patterns and as well using the market indicator. Hence base of the 2-level and confirmation confluence trading the screenshot is shown below.
3-LEVEL CONFIRMATION CONFLUENCE TRADING
On these it means having 3 different trading tools and strategies used for monitoring and for picking out percent market entry and exists, hence the below screenshot illustrates the 3-level confirmation confluence trading.
Based on the two chart shown on these section the first chart i was able to sample the 2-level confirmation confluence of the trading, thus the same to the 3-level confirmation confluence on the second chart which has 3 different indicators
A) IDENTIFY THE TREND.
B) EXPLAIN THE STRATEGIES/TRADING TOOLS FOR YOUR CONFLUENCE.
C) WHAT ARE THE DIFFERENT SIGNALS OBSERVED ON THE CHART?
FOR SALE
Hence at this point we can find our up trend, a stage at which observed the highest maximum and as well the minimum to that the structure as shown on the below screenshot.
Meanwhile the RSI and that of the EMA 21 period were used for the entr, hence the EMA is maim to identify the current trend while the RSI is to check whether the price is oversold.
Therefore we place out trade entry after the point of the break of that of the previous minimum where this was carried out, Hence our risk management is at the ratio of 1:1 having our stop loss at the previous minimum level and having out take profit at the same distance from the our point of entry.
Here I discovered that our operation was ok based on the history of the operation.
PURCHASE
We are on the bullish trend and hence we will fulfill an operation in quotation alongside the trend.
Hence based on observation the price creates a higher maximum and as well the minimum whenever is found below the EMA 21 periods, I observed that that of RSI indicator which aaa indicating price over sold creates a pushback.
Therefore while checking the retracement, I expected that the price would break off the EMA in order to enter the market to trade in the second proceeding candle which came after the breakout.
At this point, after some time the operation was successful, then I carried out my risk management by applying my stop loss at the level minimum to that of the previous candle and I placed take profit to a distance equal to that of the stop loss as well.
Then lastly, here i was able to show the screenshot of history in place to know the extent of successful result.
Hence based on the teaching carried out by my dear professor @reminiscence01 on his teaching where he showed us how important the indicator using more than one indicator which is known as confluence in trading which helps in identifying the correct and the wrong signal in order to manage risk.
Therefore the use of the indicators is to curtail the rate of the risk in trading, in order to yield dividend.
Hence with all you thought and i understood, I hereby wish you my professor a merry christmas and prosperous new year.
Hello @kingworldline, I’m glad you participated in the 6th week Season 5 of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
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