Course

The 6-indicator confluence system

Every live strategy on this site is built from the same six checks. Learn what each indicator measures, the exact rule we use, and how to apply the system to any pair — forex, gold or indices.

1. Trend — the 200 EMA

What it measures: The big-picture direction of the market.
The exact check: Price above the 200 EMA = only look for buys. Price below = only look for sells.
Why it matters: This is the non-negotiable filter. Trading against the 200 EMA means fighting the dominant money flow — it is the single biggest reason counter-trend strategies lose.
Applying it to any pair: Works on every pair and every market because it only measures where price sits relative to its own average. On fast charts (5m–15m) the 200 EMA flips often; on 1H–4H it is stable and trustworthy.

2. RSI — momentum

What it measures: Whether recent gains or losses are dominating, on a 0–100 scale.
The exact check: RSI above 50 supports buys; below 50 supports sells. Above 70 or below 30, the move is stretched — skip fresh entries.
Why it matters: RSI stops you buying while momentum is still rolling over, and stops you chasing a move that has already run its easy distance.
Applying it to any pair: RSI is self-adjusting — it compares a pair to its own recent range, so the same 50/70/30 levels work on gold, Nasdaq or any forex pair without retuning.

3. MACD — momentum agreement

What it measures: Whether momentum is accelerating in your direction.
The exact check: MACD histogram above zero for buys, below zero for sells. A histogram growing in your direction is the strongest version of the check.
Why it matters: MACD is slower than RSI, so it confirms the move has real follow-through rather than a one-candle spike.
Applying it to any pair: The standard 12/26/9 settings work everywhere. On very fast charts MACD lags more — pair it with the trend filter and never trade MACD alone.

4. ADX — trend strength

What it measures: How strong the current trend is, regardless of direction (0–100).
The exact check: ADX above 20 means a real trend exists. Below 20 the market is ranging — stand aside or expect false signals.
Why it matters: Most indicator systems lose money in ranging markets. ADX is the gatekeeper that tells you whether there is a trend worth trading at all.
Applying it to any pair: Some pairs trend harder than others — gold and Nasdaq often read 25–40, while quiet pairs like EUR/CHF sit under 20 for weeks. If ADX never clears 20 on your pair, move up a timeframe.

5. Stochastic — entry timing

What it measures: Where the current close sits within the recent high-low range.
The exact check: For buys, avoid entering when Stochastic is already above 80 (overbought). For sells, avoid below 20. The best entries come as it turns up from low levels in an uptrend — the pullback ending.
Why it matters: Trend and momentum tell you what to trade; Stochastic tells you when. It keeps you out of the top-tick entries that get stopped on the next pullback.
Applying it to any pair: Behaves the same on all pairs. On strong-trending markets (gold, indices) Stochastic can stay overbought for days — treat it as a timing check, never as a reversal signal on its own.

6. Volume — participation

What it measures: How much real activity is behind the move.
The exact check: Volume above its 20-bar average confirms the move has participation. A breakout on thin volume fails far more often.
Why it matters: Price can drift anywhere on low volume. Moves with volume behind them are the ones that reach targets.
Applying it to any pair: Spot forex has no central volume, so use your broker's tick volume or futures volume (6E for EUR/USD, 6J for USD/JPY, GC for gold, NQ for Nasdaq) — it tracks real volume closely enough for this check.

Putting it together — the 5-step process

1
Start with the trend filter
Check price against the 200 EMA on your chosen chart. That decision — buys only or sells only — comes before everything else.
2
Score the other five checks
RSI side, MACD histogram side, ADX above 20, Stochastic not stretched, volume above average. Count how many agree with the trend direction.
3
Require a majority
Enter only when at least 4 of the 6 checks agree — our live strategies use 5 of 6. Anything less and you are trading noise.
4
Set stop and target before entering
Stop at 1× ATR or the recent swing point, whichever is wider. Target at 2–3.5× the stop. If the math does not give you at least 1:2, skip the trade.
5
Backtest it on that pair
Every pair behaves differently. Run at least 20–30 historical trades before risking money — the Strategy Builder does this for you automatically.

A high-quality buy setup

Price above the 200 EMA, which is rising
RSI at 55–65 — momentum up, not stretched
MACD histogram above zero and growing
ADX at 28 — a real trend, not a range
Stochastic turning up from 30 — the pullback is ending
Volume above its 20-bar average

6 of 6 agree → trade qualifies.

A setup to skip

Price above the 200 EMA
RSI at 74 — already overbought
MACD histogram above zero but shrinking
ADX at 16 — no real trend
Stochastic pinned at 90
Volume below average

Only 2 of 6 agree → stand aside.

Applying it to any pair or market

The six checks never change — what changes is the timeframe and how strictly you demand agreement. Here is how the system adapts:

Major forex pairs (EUR/USD, GBP/USD, USD/JPY)

Best on 1H–4H. Trends are smoother but shallower — ADX above 20 is the check that fails most often. Session matters: signals during London/New York overlap are more reliable.

Gold (XAU/USD)

Trends hard and respects the 200 EMA well on 4H. Stochastic stays overbought for long stretches — do not treat it as a sell signal. Our live Gold strategies use 4H with wide reward targets.

Indices (Nasdaq, US30, S&P)

Strong trends with real volume data — the volume check is most reliable here. 4H works best; our Nasdaq 7/33 Confluence runs on 4H with a 1:2 target. Watch the New York open — the first hour is noisy.

Cross pairs (EUR/JPY, GBP/JPY, AUD/JPY)

More volatile and more prone to false breakouts. Demand the full 5-of-6 majority and consider 4H over anything faster.

Fast charts (5m–15m)

All six checks still apply, but expect more signals and a lower win rate. Only use fast charts if your backtest over at least 60 days is still positive.

Ready to build your own?

Use the Strategy Builder to pick a pair, chart and risk-reward, apply these six checks and backtest it on real prices before going live — or study the strategies already running.

Open the Strategy Builder Read the strategy guide