Confluence zone are great place to enter a trade because multiple types of traders get involve, which create a significant shift in supply and demand. We should look for Strong confluence zone to increase our probability in trading.
How to look for confluence zone:
Confluence zone are formed when multiple levels of entry signal occur near each other or overleap each other. We have to draw trend line, support resistance line and use tools to get the confluence zone. If you look for following level shown below, that will cover the most important entry level were traders will likely to enter a trade.
1. Horizontal support and resistance levels from larger timeframe.
2. Trend line support and resistance
3. Equidistance channel support and resistance
4. Fibonacci retracement levels
5. Round numbers
6. Pivot level
7. Chart pattern