Unit 1 · Level 3 · Indicators
Confluence: building a case
Confluence means independent pieces of evidence agreeing: a support level + an uptrend + bullish divergence + a volume spike. One clue is a coincidence; four independent clues is a case. Your job before any trade: count the INDEPENDENT witnesses.
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What you get asked
Why must the evidence be INDEPENDENT to count as confluence?
They're one witness with two costumes. Structure, trend, momentum, volatility, volume: five different families of evidence. One from each beats five from one.
Order the confluence checklist for a long setup
Notice League 2's machinery bolted onto League 3's lenses. Nothing replaced, everything stacked.
Match the setup to its witness count
Grade your setups A/B/C by witnesses and size accordingly, with the biggest risk reserved for A-grades. This one habit professionalizes a portfolio.
More confluence justifies more ___; less confluence demands less.
Still capped by the 1% rule, but WITHIN it, A-setups earn the full 1% and C-setups earn a pass. Evidence prices risk.
The anti-pattern: a trader finds a trade FIRST, then hunts indicators that agree. This is…
Evidence collected after the verdict isn't evidence. With nine indicators available, SOMETHING always agrees. The honest order: setup criteria first, then let the chart pass or fail them. The boss awaits. 🐜
The rest of this unit
RSI, MACD, Bollinger Bands, and confluence: interrogating witnesses without obeying them.