This 544 Pip Opportunity Is Backed Up By Confluence!

In this idea on GBP/USD we find confluence of two major chart patterns. A supporting trend line and a horizontal support zone.

In trading, the presence of confluence refers to a circumstance where multiple technical analysis factors collectively form the same indication. Since multiple factors are combined, confluence has the potential to greatly increase the reliability and accuracy of trades. Arguably confluence is the most important probability enhancer in trading.

The support zone is created due to the S/R flip. Besides buying at support and selling at resistance, the ”Support/Resistance Flip” principle provides reliable entry opportunities. Although supports and resistances are likely to hold, they do not always hold.

After a support or resistance is broken, the level remains useful. This is due to the general trading rule that a broken support becomes resistance, and a broken resistance becomes support. In other words, once a broken resistance level gets retested, it tends to act as support. This concept is particularly reliable when a support or resistance level breaks on high volume.

Together, this marks a very high probability reversal point. I see a great potential here for a 544 pip trade set-up.

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!