Finding Confluence with Fibs, Support & Resistance, and Pivots

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Video Transcription:

Hello, traders. Welcome to the Pro Trading Course and the fourth module, Day Trades and Short-Term trades. In this lesson, we are going to teach you how to find confluence with the monthly high low and the weekly high low and the previous support and resistance levels, Fibonacci retracement levels and pivots. Now, we’re going to go directly into the chart. And as you can see, we only have on the chart the current weekly high, current weekly low, current monthly high, and current monthly low.

Now, we are still looking at this zone right here around the 128-73. And we are going to look for trading opportunities. Now, we already know that it is very likely that we are going to bounce from it, because we are trading on the monthly range, and we are at the lows of the week.

Finding Confluence levels from previous lows

Now, the first thing we’re going to do is look at the previous low, the previous low is right here. Let me just draw a line right here, and well, you can see that we tested the previous low ones but we are retesting it right now. And to get even bigger or even more, and to get even stronger levels we are going to have to go to the daily.

Because the U.S. dollar/Canadian dollar has been in a down move, a very strong down movie, and if we want to find levels of support that are in play right now we have to go to a date.

Finding Confluence levels from previous lows1

So right here we are on the daily time frame, and we are going to look for those levels. And those bull-bear zones that I think it’s going to work for us is this one right here. You’re gonna see that we are really in a very strong bull market, and this is the zone that we have tested. Well, strongly before breaking it to the upside, retesting it, and making these high. And then we dropped all the way down here. So we are going to use this zone as our bull bear zone or as our zone of support right now.

Now that we have our level of support, I don’t think on the daily we’re going to find Fibonacci retracement levels that are important for us on the lower time frames. And the reason is that we have retraced almost 100% of this move to the upside. And drawing the 100% Fibonacci retracement really doesn’t have any goal. So we’re going to go back to the hourly, and you can see that our technical analysis is actually looking very good in this area.

Finding Confluence levels from previous lows2

We do have these very important zone of support that we drew on the daily underground [SP] 129. We have the previous area of support and, of course, we are going to use the Fibonacci tools right now. First of all, we are going to draw a Fibonacci retracement level from this low to this high. We already are through the 100, but I want to see if we are close to the 113. So this is the Fibonacci retracement level, from this low to this high, and as you can see we are exactly at the 113 at the weekly and monthly low.

Now what I’m going to do is I’m going to draw another Fibonacci retracement from the second leg up. We have the entire move up. Now I want to see which level we are on the from this low to this high, which is the second leg up. So I’m going to grab the Fibonacci retracement tool from this high to this low. And as you can see we are the ones who see one-eighth [SP] right here.

Finding Confluence levels from previous lows3

So basically this zone has the monthly low, the weekly low, the 113 from this low to this high, or the entire move to the upside. We have the 161.8 of the last leg of the move to the up side, we have the daily support, and we have the previous low. So this zone right here is going to find a lot of buyers. This is exactly where we should think of getting long.

Now what I’m going to do right now is I’m going to add the pivots to this chart. And we are going to use the weekly pivots and the daily pivots. The chart is going to look a little clustered, because we are going to use the daily support and the weekly support and resistance, but I’m going to show you how to eliminate visually the levels that you are not going to be using.

All right. So I’ve added the weekly pivots. You can see that we have the weekly pivot here, the weekly support one, and the weekly support two in confluence with all of these levels that we already found. We have the daily pivot here and the daily support one also in confluence. So, basically, we are not going to be using the daily support three, two, and one, or the weekly support one.

And because we are only looking for entries at this time, we are going to eliminate them, okay? Now, your chart looks more visually attractive. Of course, that after the rejection of the current monthly low, current weekly low, you know that we have the strong daily resistance. We have the Fibonacci levels that are actually targets from this short position at the weekly high and we have the daily support one and the weekly support two, also confluencing with those levels.

Finding Confluence levels from previous lows4

You know that this is a very strong area of bounce or a possible area where price might bounce. So you have a high probability setup, only using these levels on your charts. And basically what you’re going to do is you’re going to go long around this level after the rejection with a stop loss below the week of the scandal right here. That should give you a risk of around 80 pips.

That is if you had made the analysis beforehand. But if you have made the analysis beforehand, you might just as well put on a pending order around this level, around the weekly and monthly low, which confluences with the daily support one and the 113. And you can put on the stop loss below the 161.8.

I mean, those are two types of entries. One is more aggressive than the other, and I choose not to be aggressive with my trading. I need confirmation. But in any case, you can do both and still be profitable when finding this type of confluence.

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