IMPROVE YOUR TRADING | 4 TYPES OF TRADE CONFIRMATION ✅👌
"Look for a confirmation!"
"Wait for a confirmation!"
When I was learning how to trade and when I was watching and reading different trading educators, these words naturally pissed me off. What the hell are you talking about? What confirmation?
It was a full-blown mystery...🤯
Then, once I started to mature in trading and trade full-time, I became an author on TradingView.
Posting my forecasts and trading setups, I frequently mentioned the confirmation.
And now the newbies that are reading me and learning from me are pissed off...🤬
That is so funny I guess.
But the truth is that the confirmation must become a fundamental part of your trading strategy. It is your key to successful trading.
What exactly is the confirmation?
It depends on many many different things, in this article I will discuss with you the 4 main types of confirmation and give you detailed examples.
1️⃣ - PRICE ACTION CONFIRMATION
That is actually what I prefer.
Analyzing different markets and searching for decent trading opportunities often times we find some peculiar instruments to watch.
Identifying the market trend and key levels we find the potential spots to trade from.
But do we just open the trade once the "ZONE" is spotted?
I wish it could be that simple...
Trading just the zone, without additional clues brings very negative figures. We definitely need something else.
Price action & candlestick patterns can be those clues.
Accurate reflection of the current local market sentiment makes the patterns a very reliable confirmation.
Dodji's, pin bars, double tops/bottoms ...
Proven by history, the skill of identification & reading the patterns will pay off quickly.
Being in some sense the language of the market, the patterns are the fundamental part of my trading strategy.
2️⃣ - FIBONACCI LEVELS
Fibonacci levels are a very popular technical tool. Being applied properly it helps the trader to confirm or, alternatively, disqualify the identified "ZONE".
With multiple different methods like confluence trading, fibs are applied in hedge funds and various banking institutions.
The main problem with the fibs, however, is complexity and a high degree of subjectivity. Meeting different traders and watching different posts on TradingView I noticed that all traders tend to have their own vision. There is no universal system to apply here, a proper fib.confirmation technique can be built only with long-lasting backtesting and practicing.