Introduction
One Signal Isn’t Enough
Every trader sees patterns.
But Smart Money sees confluence.
Multiple aligned factors that confirm intent.
Confluence is what turns a setup from possible to probable.
It’s the overlap between structure, liquidity, and timing,
the foundation of every high-probability trade.
What Is Confluence?
The Definition:
📊 Confluence means the alignment of multiple technical factors
that point to the same directional outcome.
💬 In simple terms:
Confluence is when several pieces of logic agree,
and together, they build confidence in your setup.
Why Smart Money Uses Confluence
Smart Money never relies on one indicator, candle, or guess.
They build conviction using several market elements that support each other.
Confluence helps to:
- Filter low-quality setups.
- Increase probability through confirmation.
- Maintain consistency and remove emotional trades.
💡 The more aligned factors you have, the stronger the setup.
The 5 Pillars of Smart Money Confluence
Smart Money traders look for alignment across five key elements:
1️⃣ Market Structure:
Directional flow confirms the overall bias.
(HH/HL = bullish, LH/LL = bearish.)
2️⃣ Liquidity:
Identify where price is drawn, equal highs, lows, or inducements.
3️⃣ Displacement & Confirmation:
The market shows intent with an impulsive move (BOS or CHoCH).
4️⃣ Entry Model:
Look for refined zones: OB, FVG, or mitigation points that align with bias.
5️⃣ Timing:
Session context matters. London/NY liquidity windows validate Smart Money movement.
💬 One confluence builds interest.
Three or more build conviction.
Example
Bullish / Bearish
Bullish:
- Structure forming Higher Highs & Higher Lows → bullish bias.
- Liquidity below equal lows → sell-side sweep expected.
- Price sweeps lows → strong displacement upward.
- Order Block in discount zone aligns with bias.
- London session: Smart Money entry window active.
Bearish:
- Structure printing Lower Highs & Lower Lows → bearish bias.
- Liquidity above equal highs → inducement confirmed.
- Price sweeps highs → bearish displacement candle follows.
- Refined Order Block / FVG in premium zone aligns.
- New York session: high-probability reversal window.
📍 Result: High-confidence short setup with institutional logic.
How to Build Confluence on TradingView
1️⃣ Identify market structure direction.
2️⃣ Mark liquidity zones above and below.
3️⃣ Wait for displacement and confirmation.
4️⃣ Locate refined entry zones (OB/FVG).
5️⃣ Confirm session timing: London or NY.
6️⃣ Only execute when at least three elements align.
💬 Pro Tip:
If confluence doesn’t line up, don’t trade. No signal is better than a weak one.
The Do Nots
Common Mistakes Traders Make
❌ Forcing confluence:
→ Seeing alignment that isn’t there.
❌ Overcomplicating:
→ Too many conditions can cause hesitation.
❌ Ignoring session timing:
→ Confluence loses edge outside of liquidity windows.
❌ Trading with weak structure:
→ Without trend or displacement, confluence doesn’t exist.
Final Thoughts
Confluence is what gives Smart Money traders confidence,
clarity, and consistency.
Every setup must earn your entry,
and confluence is the test it has to pass.
When structure, liquidity, and timing align,
you don’t need luck, you have logic. Use VWAP to understand when price is balanced, and when it’s about to deliver.