Alot of people have this question in mind on what is confluence in forex trading.

And why is it so important.

Lets start with the Forex Market.

It is made up of traders (Big or Small) to determine the flow of the market.

For example: if there are more people buying the Bulls than the bears at a period of time. The market will most likely go Bullish. And so forth if it goes bearish.

Therefore, forex trading is about understanding the market sentiments. “Where is the big guys with the big influx of money moving the currency market to?”

And this leads to CONFLUENCE.

For example.

Forex Trader A trades only on Fibonacci signals

Forex Trader B trades only on Moving Average signals