What is Confluence?
Konfluens
In short
Several independent pieces of evidence lining up in one price zone — for example a Fibonacci level, old resistance and an order block. Such a zone is considered more reliable than a single level.
Also known as: konfluens zonasi
Confluence is several unrelated pieces of evidence lining up in one price zone. For example, if the 61.8% Fibonacci level, an old resistance level (now support) and an order block all fall around the same price, that zone deserves more attention than any single level.
How it works
Each tool on its own produces plenty of false signals. But when different methods point to the same place, different groups of traders place orders there, and the odds of a reaction rise. Confluence is usually built from:
- a horizontal level (support/resistance, role reversal);
- a Fibonacci level or the golden pocket;
- a moving average (for example the 50-day);
- the trend direction on a higher timeframe.
An important nuance
The evidence must be independent. RSI, Stochastic and CCI are all calculated from the same data (price), so the three together are not "three confirmations" but close to one. Confluence is not a guarantee: it only improves the odds, and a stop-loss is still required.
Impulse $80 → $100. The golden pocket (61.8–65%) is $87.64–87.00, with old resistance at $88 (now support) right above it. Price dipped to $87.1 and closed at $88 with a hammer-like candle. Stop below 78.6% ($84.28) — at $84.
Example
An illustrative stock made an impulse from $80 to $100.
- Fibonacci 61.8%: $100 − $20 × 0.618 = $100 − $12.36 = $87.64.
- Old resistance (broken earlier): $88.
- Daily order block: $87–$89.
All three fall in the $87.50–$88.50 zone. The trader plans an entry at $88, a stop below the zone at $85.50 and a target at the prior high of $100:
- Risk: $88 − $85.50 = $2.50.
- Potential profit: $100 − $88 = $12.
- R:R ≈ 1:4.8 ($12 ÷ $2.50).
You can check the numbers with the risk/reward calculator.
Mistakes and tips
Don't count indicators built from the same source (RSI + Stochastic) as two confirmations — they repeat each other.
Keep the zone tight: if the evidence is spread over 5–10% of price, that's not confluence, just a lot of lines.
The strongest factor is alignment with the higher-timeframe trend. Counter-trend confluence works much less well.
Touching the zone is not an entry signal; wait for confirmation, such as a rejection candle.
Frequently asked questions
- What is confluence in trading and how do you find it?
- Draw the main horizontal levels first, then Fibonacci levels and moving averages. A place where several lines cluster in a narrow zone is a confluence zone.
- How many confluence factors are enough?
- Two or three independent factors are usually enough. Hunting for more makes the analysis complicated without making it noticeably more accurate.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
- Fibonacci: retracements, the golden pocket and targetsPicking the right swing, the 38.2/50/61.8/78.6% levels, the golden pocket, confluence and 1.272/1.618 extensions to plan an entry, stop and target.Open lesson · 12 min
- Order blocks: footprints of big playersWhat an order block is, which conditions make it valid, how to define the zone, mitigation and breaker blocks, entries, stops and targets, failures, and combining OBs with Fibonacci and FVGs.Open lesson · 13 min
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