Before you learn any strategy, you will be a better trader understanding confluences!

What Is A Confluence?

When it comes to trading a confluence is anything deemed to help your success rate improve. These can be anything from indicators and oscillators to patters and indices.

Since we don’t use indicators or oscillators here is the list that we look at depending on which trading style we are using:

Opening Range Breakouts

Liquidity

Price Action

Risk To Reward

Bias

ORBS- OPENING RANGE BREAKOUTS

The opening range is the price range between the highest high and lowest low reached during the first part of the trading session, usually defined by a specific timeframe like 5 or 15 minutes.

15 Min ORB

LIQUIDITY

Liquidity can be best described as Buy Side Liquidity or Sell Side Liquidity. There are multiple types of liquidity that we target. ORBs, Equal Highs/Lows, News Highs/Lows and Recent Highs/Lows. Remember that these only act as confluences and can often be left behind so we use our stop loss strategies to suit our targets.

Equal Highs/Equal Lows

In this example we have See Side Liquidity where an Equal Low was formed right on an ORB, very strong draw! *When there are opposite equals on your chart be careful. That usually means indecision in the market and your win probability goes down.

Red Folder News (RFN)

We will often see great profits the days that have Red Folder News. They key is to wait until that scheduled time hits. To see the schedule go to the bottom of our website and click on RFN- ForexFactory. *Styles of trading and Confluences DO NOT work as well before any RFN for that day!

PRICE ACTION

Since we do not use indicators learning price action is critical to your success. We are looking for a mix of trends (bias), volatility, liquidity sweeps, and support & resistance levels. Below are examples of both good and bad PA.

Incredible Price Action

You will usually see the best price action in the first hour and half or the US market open. It does however sometime extend past that time frame as well as sometimes pick back up the last 2 hours of the trading day.

Price Action To Avoid

This is a stretch of PA in a “Kill Zone”. This is the most dangerous PA because it shows signs of volatility but is destroying the Bulls and Bears every few candles. Just when you think a strong trend will go you get wrecked!

RISK TO REWARD & BIAS

Risk To Reward

Good risk management is a key factor to this trading style. By understanding the risk/reward ratio of every trade before you enter, you will have a clearer vision of the best setups to minimize your losses and maximize your gains. In general 1 to 1 RR is not worth entering. We look for 2 to 1 or better. 1.

Bias

We don’t restrict ourselves to just one daily bias. We often see a shift in a trading day. It is important to know when the bias changes to help sustain a high and profitable win rate. When in between the ORB’S we look for both bullish and bearish set ups. Once we go outside of that daily’s ORBs we shift to that bias.

Now that you know what confluences are let’s teach you the two trading styles that make us successful at trading!

Strategy 1

ORB INVERSIONS

We use the 5 and 15 min Opening Range Breakout (ORB) markers for all of our setups. They are the most powerful way to trade the 1 min entries! With our ORB Inversion Method we will only make entries when an ORB is hit or swept.

3 Colors We Use

Purple Lines- 5 Min Current Day

Blue Lines- 15 Min Current Day

Orange Lines- 15 Min Previous Day/Days

Red Lines (MIMIC)- Equal High/Low or News High/Low that PA Obeys

There are 2 different styles candles we use when we enter. We encourage all of our members to use our Trading Sheet to keep track of which one suits their trading style:

OB1- When the candle body or candle wick stop directly on an ORB

OB2- When the candle body or candle wick breaks an ORB

In this example both of the OB1’s string landed directly on an ORB

In this example the first OB2’s body broke the ORB and the ones after that only had thir wicks break the ORB.

With the 5 Min ORB we look for a retest of either the top or bottom for our first entry then as the candles go higher or lower we look to the 15 Min ORBs for entries and exits. The 5 min ORBs will be used much less in volatile markets which is what we want for better trades.

Example

Because we use Price Action and Risk To Reward as some of our confluences we look more to the 15 min ORBs over the 5 min ORBs.

Example

Recent Highs/Lows

We use these mostly as a backup when there are no ORB close enogh to target. These also help us monitor stop loss markers.

ORBS

With the 15 min ORB’s you will often see price action move from one ORB to the next one above or below. These are very powerful markers on the chart and one of the most important confluences that help us decide whether to enter or not enter into a trade.

GOOD ENTRIES

3 LARGE WINS 1 SMALL LOSS

2 Wins 0 Losses

Entry Off Of The Power ORB

4 Wins 0 Losses

SLOW ROLLERS

ORB’S are also a great way to make money in the off-peak hours. Here we look for two things:

1. A large gap between two ORBs and hit the very first crash of the top or bottom.

2. Look for a trend forming in between two ORBs with smaller gaps of the top and bottom and inverse them.

3. The most profitable wat to trade Slow Rolls is by using runners.

SLOW ROLL

With a larger gap between two ORBs we look for a slow climb up or down and a turn around at the ORB.

SLOW ROLLING TRENDS

This is one of the times that we look to go both with and againts a bias. These are quick sniper hit that become veery profitable during off-peak hours and are very easy to spot.

Strategy 2

IFVG Trades- Relies Much More On Confluences

Inversing Fair Value Gaps

With this style we will add indices to use as a confluence.

When we do not have any valid ORB’s on the chart we will use this style for our entires. However, when there are ORB’s in the area many times we are already in the trade.

Rules For Entry:

Wait For Strong Price Action

Look For Liquidity To Be Swept

Wait For An FVG To Be Disrespected

Confirm With Candles 2 min Through 5 min

FAIR VALUE GAPS

A fair value gap (FVG) is a price movement gap that occurs when there’s a significant imbalance between buying and selling.

Bullish FVG- We Enter Short

Bearish FVG- We Enter Long

USING ORBS WITH FVGs

The ORB Gives Us Confluence To Enter

The ORB Gives Us Confluence To NOT Enter

USING ES AS A CONFLUENCE

Using ES as a confluence there are 3 things that we look for:

1. PA is moving in the same direction and the same volatility.

2. Have equal highs/lows been swept.

3. SMT (Smart Money Techniques).

What Is An SMT

Smart Money Technique- An SMT is when one indice takes a high/low and the other one does not. We use ES to for a confluence with NQ. These can often increase your win probability between 5-10%.

Bullish SMT

NQ Lands perfectly on the 15 min ORB

Bearish SMT

STOP LOSS STRATEGIES & RISK MANAGEMENT

RUNNERS

Taking profits on the majority of the contracts in the trade then leaving one or more runners to capture more profit. This gives you the opportunity to make more returns from that trade without any additional risk. They are profits you can afford to lose, without your account balance going down at the end of the day.

TRAILING THRESHOLD

Although they work differently, it is important to always know where your Trailing Theshold is in both your EVAL & PA accounts.

Different Prop Firms will different ratios and rules so it is important to refer to the one that you are using.