Factors of confluence
1. **Support and Resistance Levels**:
- The presence of support or resistance levels that coincide with a particular trading signal can add significant confluence. Price often reacts at these levels.
2. **Trendlines**:
- Trendlines, whether drawn on price charts or on indicators, can provide confluence when they intersect with other technical factors.
3. **Fibonacci Levels**:
- Fibonacci retracement or extension levels can be used to identify potential reversal or continuation points when they align with other signals.
4. **Moving Averages**:
- The crossover or interaction of various moving averages can provide confluence, especially if they confirm a particular trading direction.
5. **Candlestick Patterns**:
- Combining different candlestick patterns that occur together can enhance confluence and strengthen trading signals.
6. **Volume**:
- High trading volume can add confluence to a trading signal, indicating strong participation and support for a particular move.
7. **Divergence**:
- Divergence between price and technical indicators like oscillators can provide confluence by signaling potential trend reversals or continuations.
8. **Chart Patterns**:
- Recognizing chart patterns such as head and shoulders, double tops, or flags that align with other factors adds to confluence.
9. **Economic Events and News**:
- Fundamental factors, such as economic releases or geopolitical events, can provide confluence when they coincide with technical signals.
10. **Timeframes**:
- Multiple timeframes showing similar signals or trends can be used to add confluence. A signal on a higher timeframe carries more weight.
11. **Market Sentiment**:
- Sentiment indicators, such as the COT (Commitments of Traders) report or market positioning data, can offer confluence when they align with technical analysis.
12. **Pattern Recognition**:
- Combining various technical patterns (e.g., candlestick, chart, and harmonic patterns) in the same direction can strengthen confluence.