Confluence

What it is

Confluence means more than one reason lining up at the same price or time: a higher-timeframe level, a fair value gap, a session time and a liquidity sweep, for example. Traders use it to filter for their best setups.

The catch is that many confluences aren't independent. RSI, the stochastic and CCI are all built from the same prices, so three of them agreeing is closer to one reason than three. A Fibonacci level and an order block drawn from the same swing are also linked. Real confluence comes from different kinds of evidence: location, time, structure and, where available, order flow.

How to spot it

• List each reason for a trade and ask whether it's really separate from the others.

How to use it

• Define the few confluences your strategy needs and tag them in your journal, so you can see which ones actually improve results.
• UNFLD's journal lets you tag the confluences on each trade, so you can review which ones your best trades had.

Common mistakes

• Adding indicators until something agrees.
• Waiting for so many confluences that you never trade, or forcing them after you're already in.

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