Step 1 of 5
A signal is not a trade
An RSI turning up, a moving average crossover, a hammer: each is a signal, a piece of evidence. On its own each one is right often enough to look convincing and wrong often enough to cost you. A trade needs several pieces of evidence pointing the same way, in a place that matters, with a stop you can afford.
Confirmation does not make a trade safe. It filters out the weakest setups, so the ones you take have a clear reason, a clear stop and a clear target.
It also makes your journal useful. When every trade has the same three layers written down, you can see later which layer failed when a trade lost, and whether the fault was the setup or the execution.
Step 2 of 5
Three layers of confluence
| Layer | Question | Example |
|---|---|---|
| Context | What is the higher timeframe doing? | 4h uptrend, price above a rising 50 EMA |
| Location | Is price at a level that mattered before? | Support zone at 1.0815–1.0820 marked on 1D |
| Trigger | Has something happened at the level? | A 1h hammer closes on the zone; RSI turns up from about 40 |
When all three agree, you have a setup. When only one or two do, wait. Most of the time the chart is not offering a good trade, and the right action is none.
Step 3 of 5
Do not count the same thing twice
Indicators in the same family are built from the same closes. RSI, Stochastic and CCI turning up together is one opinion about momentum, said three times. MACD and its histogram are the same.
Choose one tool per job:
- Direction: structure plus one moving average.
- Momentum: one oscillator, such as RSI or MACD.
- Volatility: ATR, for the stop distance.
- Location: your support and resistance zones.
The Terminal allows up to 8 indicators per chart. Using three or four that measure different things keeps the chart readable.
Step 4 of 5
A pre-trade checklist
- The higher timeframe trend agrees with the trade.
- Price is at a level you marked before the session.
- The trigger candle has closed.
- The Calendar tab shows no high-impact news on this symbol inside the next few minutes. Your plan pauses new trades from 2 minutes before to 2 minutes after such news; closing or reducing positions stays allowed.
- The take profit is at least as far as you planned relative to the stop.
- Risk is your usual amount, for example 0.5%.
- The box If the stop loss hits leaves room on both the daily and the overall loss limit.
If one line fails, skip the trade. Write the skipped setup in your journal too.
Step 5 of 5
Alerts, outside signals and bots
Set an alert at the zone instead of watching the screen. When it fires, run the checklist; do not act on the alert alone.
Signals from groups or other traders are someone else’s evidence. Check them against your own three layers and your own stop and size before you act. Expert advisors and trading bots are allowed only by agreement: write to support first, before you connect anything to your account.
Recap
- A signal needs context, location and a trigger. One of the three alone is a guess.
- Use one tool per job; three oscillators agreeing are one opinion, not three.
- Expert advisors and trading bots are allowed only by agreement: write to support first.
Check yourself
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