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      Trading 101: How confirmations are used during Trading - Stocks Telegraph

      By ST Staff

      Published on

      August 20, 2021

      2:42 PM UTC

      Trading 101: How confirmations are used during Trading - Stocks Telegraph

      Confirmations are known as additional confluence when you are trading. It is important to note and know about confirmations during looking for entry setups. It helps to get a good entry point during a trade.

      Trading Styles and Confirmations

      Many different traders use different trading styles to find entry setups. Somme use VSA, some use s and r some use Wyckoff, Elliott waves, and many more. But all of these traders look for potential additional confirmations before executing their trades. One of these methods is to look at the lower time frame

      Lower Time Frame Confirmations

      One way of getting confirmations about trend change or about the fact that whether the market is going to bounce or retrace from a certain point is to look at lower time frames.

      Suppose a coin is dropping and moving down after touching the upper resistance. Now that asset is on support. Normally people long from this point but a very good idea is to look at LTF to understand whether the market is actually bouncing or not.

      If you are on Hourly Time Frame and you see an asset touching support, go to lower time frames, you would see that the market might bounce from that zone. But should you take a trade at this point? No, because this might be a deviation. Wait for the market to touch the support again (LTF). If the continuation is going to happen it might wick down and touch the zone and then retrace back to being bullish again. This here can be your trigger point to execute your trade.

      Illustrated below is an example how we can use this.

      Figure1.Tel 4H TF Chart
      Figure1.Tel 4H TF Chart

      A chart about $Tel on 4H TF, notice the zone and the formation of order blocks. You might take a trade during the touching of this zone, but we would look at LTFs, say 15 min to look at additional confirmation.

      Figure2.Tel 4H TF Chart
      Figure2.Tel 4H TF Chart

      Look closely at the 15 min chart. The price wicked down the first time and then bounced back. But a better way is to wait for the market to come back and test the support zone again. As you can see in the chart, the price did come down and touched the zone again, with a small wick. That can be a trigger point for you to go long.

      In short additional confirmations helps you make better decisions regarding how the price may move.

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