Confluence

[nunrgguy]

Just thought I'd start a thread with an important sounding word.
The more you use it, the more important and knowledgeable you are.

 

[donaldduke]

It might as well be called Flatulence, and will have the same effect on your trading results

 

[nunrgguy]

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

 

[anley]

I use it everyday

But at the same time, it's no silver bullet.

 

[Splitlink]

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.

 

[Shakone]

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.

 

[Cornix]

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.

 

[nunrgguy]

​

I use it everyday

But at the same time, it's no silver bullet.

Dunno, the pong certainly keeps vampires at bay

 

[the hare]

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.

 

[Cornix]

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.

 

[andycon]

I like milk and sugar on it for my breakfast, and I only like Kellogs

 

[Pazienza]

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