Confluence

This is a discussion on Confluence within the General Trading Chat forums, part of the Reception category; Just thought I'd start a thread with an important sounding word. The more you use it, the more important and ...

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Old Jul 28, 2011, 11:45am   #1
 
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Confluence

Just thought I'd start a thread with an important sounding word.
The more you use it, the more important and knowledgeable you are.
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Old Jul 28, 2011, 12:14pm   #2
 
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Re: Confluence

It might as well be called Flatulence, and will have the same effect on your trading results
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Old Jul 28, 2011, 12:38pm   #3
 
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Re: Confluence

nunrgguy started this thread
Quote:
Originally Posted by donaldduke View Post
It might as well be called Flatulence, and will have the same effect on your trading results
Flatulence in confluence with other factors = large downward move
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Old Jul 28, 2011, 1:29pm   #4
Joined Dec 2003
Re: Confluence

I use it everyday

But at the same time, it's no silver bullet.
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Old Jul 28, 2011, 1:37pm   #5
Joined Nov 2001
Re: Confluence

Quote:
Originally Posted by nunrgguy View Post
Just thought I'd start a thread with an important sounding word.
The more you use it, the more important and knowledgeable you are.
I'm not going to use it. I don't want anyone to get the wrong idea about me. However, you must have something that you want to tell us, so don't keep us in suspense.
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Old Jul 28, 2011, 1:59pm   #6
 
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Re: Confluence

If no sort of confluence helps at all then what you're suggesting is that if an important country or huge bank surprisingly defaulted tomorrow, that would have the same effect on the market as if 10 countries/huge banks all defaulted tomorrow. That kind of thinking makes no sense to me. Does it to you? At the same time, if you are using confluence of stochastics, RSI and some other oscillator, with all different numerical settings then perhaps that kind of confluence won't help at all.

Where people enter and where people exit has an effect on the market. If you can find where lots of people will enter, and know roughly where there exit is, then that's valid information in my book.
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Old Jul 28, 2011, 2:16pm   #7
 
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Re: Confluence

If you mean a few factors working together by confluence, then yes, it is a very powerful tool to use, much better than considering just a single factor to enter trades.
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Old Jul 28, 2011, 2:20pm   #8
 
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Re: Confluence

nunrgguy started this thread
Quote:
Originally Posted by anley View Post
I use it everyday

But at the same time, it's no silver bullet.
Dunno, the pong certainly keeps vampires at bay
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Old Jul 28, 2011, 2:43pm   #9
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Re: Confluence

Quote:
Originally Posted by cornixforex View Post
If you mean a few factors working together by confluence, then yes, it is a very powerful tool to use, much better than considering just a single factor to enter trades.
I suppose I am an advocate of confluence, but the issue of multicollinearity really needs to be taken into account particularly with TA based systems. Often the confluence that people think is there simply isnt.

I think I came to the conclusion that excessively complex systems based on confluence tend not to perform much better than relatively simple systems, but relatively simple systems that uses confluence from different basic types of TA (volaility, trend, S&R etc) tend to perform much better than one thats based on a much simpler signal.
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Old Jul 28, 2011, 3:01pm   #10
 
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Re: Confluence

Quote:
Originally Posted by the hare View Post
I suppose I am an advocate of confluence, but the issue of multicollinearity really needs to be taken into account particularly with TA based systems. Often the confluence that people think is there simply isnt.

I think I came to the conclusion that excessively complex systems based on confluence tend not to perform much better than relatively simple systems, but relatively simple systems that uses confluence from different basic types of TA (volaility, trend, S&R etc) tend to perform much better than one thats based on a much simpler signal.
Yes, I also like simple entry signals (reversal bars, what can be simpler than that ), but at the same time prefer very much to trade within the bigger context (or at least not against the obvious bigger context).

So confluence for me is when a few time frames "agree" on a particular direction signal or when signal occurs at the intersection of a few significant price levels.
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Old Jul 28, 2011, 3:44pm   #11
 
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Re: Confluence

I like milk and sugar on it for my breakfast, and I only like Kellogs
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Old Jul 28, 2011, 4:06pm   #12
Joined Jan 2011
Re: Confluence

Use confluence of market mood with basic price action and support and resistance. That's all you need.
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