Chanel Trading Trends
This is a channel that has the potential to build wealth, this is the price of forex trading chanel, but it is very important that we have to learn everything about this price channel before making a trade decision.
What is a Forex and bitcoin Trading Price Chanel?
The price chanel also known as Trend Channels is an important tool in technical analysis and is an extension of the trend line; While building a trend line, we draw a line to identify the direction of the trend, and it is very common that many times we find the price of the currency pair to honor and test positively on the trend line, and when the price testes positively, we benefit from them on One side ie we either get potential future entry or exit points. In the same way, to benefit from the other side, the line of channels with the same angle is drawn parallel to the initial trend line forming the price chanel.
the price channel is the area between two parallel lines; One is the main trend line, and another is the channel line. In a trendy market, price action is often seen moving in a proportional trading range, as a result, to benefit from them, a price channel is withdrawn. The top trend line connects the high swing price point, and the down trend line connects the low swing price point. The upper trend line acts as the resistance level, and the lower trend line acts as the support level.
Price chanel is one of the most useful trading tools in technical analysis. If the price respects the price channel, we can easily understand the strength of the current trend and accelerate it accordingly, failure to test any of the trend lines is an indication that the current trend is losing its momentum and will probably show a new direction. follow. Chanel price trading strategy is useful for short to medium term trading.
There are 3 Type of Price Channel
1. Bullish Channel (High High and Higher Low's)
2. Bearish Channel (Lower High and Lower Low's)
3. Sideways chanel (Ranging)
Please remember the price channel means a channel with two parallel lines and a channel where the price respects both the trend line if the price action does not respect the two trend lines then this is not a valid price channel. Now, let's look at these three types of price chanels with examples.
The Bullish Channel is also known as Ascending, Upward, Inclining Trend Channel
The Bullish Channel is also known as Ascending, Upward, Inclining Trend Channel
The bullish channel is a price channel constructed by two parallel ascending diagonal lines, starting at a lower price point and continuing forward diagonally until price action respects the upper and lower trend line.
The bullish channel is the price channel where the upper trend line connects the high swing high's price point, and the lower trend line connects the higher price point of the lower swing level. The accelerated price action above the upper trend line indicates strong bullish momentum, but if at some point, price action closes below the trend's lower line indicating there is a high possibility that the market will change its direction.
Bearish Channel is also known as Descending, Downward, Declining Trend Channel
Bearish chanel is a price chanel built by two parallel line diagonal lines, starting at a higher price point and continuing to drop diagonally until price action respects the upper and lower trend line.
Bearish channel is the price channel where the down trend line connects low swing low's price point, and the upper trend line connects the high swing's price point. The accelerated price action below the upper trend line indicates a strong bearish momentum, but if at any point, price action closes above the trend's higher line indicating there is a high possibility the market is changing direction.
Sideways Channel is also known as Horizontal, Ranging Trend Channel
The side channel is a price channel built by two parallel horizontal lines, which continues until the price action respects the upper and lower trend lines.
Sideways chanel is a price chanel built on the sideways outdoor market where the upper trend line connects the high swing price point, and the down trend line connects the low swing price point. Accelerated price action on any side of the trend line indicates an escape and there is a high likelihood the market will change its direction.
Some Important Facts (Confidential) about the Price Chanel
• perfect price chanels are always built with 2 trend lines parallel to each other.
• The upper trend line acts as a resistance level indicating the sales zone, and the down trend line acts as the support level indicating the buying zone.
• Sometimes the price may not follow perfectly the price channel and may break the trend line, but should not approach the opposite direction of the price ie the price channel is the trend channel, which indicates a crude idea of the resistance and support levels. In accordance with the pace of the trend.
• Never force price chanels to adjust according to price action. If price action does not respect both trend lines parallel to each other, then it is not a valid price channel.
Conclusion
Price chanel may not be perfectly described at all times; The price broke slightly above and below, consequently, the price channel indicates a rough estimate of future buying and selling zones. Trading with a bigger picture always helps. price chanel should be used as a tool in our trading strategy to filter and confirm trade setup. The more you will practice, the more you master the art of using price chanel
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