Confluence: When Levels Line Up

Why a price zone where several different levels meet is more meaningful than any single line, and a simple checklist for rating a level.

Stronger together

Any single level, whether a Fibonacci ratio, a pivot or a round number, is watched by some traders and ignored by others. When several independent reasons point to the same price zone, more traders are likely to act there. Traders call that overlap confluence.

For example, a pullback might reach the 50% retracement, a prior breakout level and the rising 50-day moving average all within a dollar or two. That zone deserves more attention than any one of those lines alone.

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