Scribd Logo
Upload

Welcome to Scribd!

  • 30 views

    G1-T3 Trend Channels

    Uploaded by

    The Shit
    Trend channels are created by drawing parallel lines along the angle of an uptrend or downtrend. The upper line marks resistance and the lower line marks support. Channels with an upward slope are considered bullish, while downward sloping channels are bearish. To create a channel, draw a parallel line touching the most recent peak or valley. Price touches of the lower line can indicate buying opportunities, while touches of the upper line may indicate selling opportunities. Channels provide areas of support and resistance to help determine good entry and exit points for trades.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    G1-T3 Trend Channels

    Uploaded by

    The Shit
    30 views4 pages
    Trend channels are created by drawing parallel lines along the angle of an uptrend or downtrend. The upper line marks resistance and the lower line marks support. Channels with an upward slope are considered bullish, while downward sloping channels are bearish. To create a channel, draw a parallel line touching the most recent peak or valley. Price touches of the lower line can indicate buying opportunities, while touches of the upper line may indicate selling opportunities. Channels provide areas of support and resistance to help determine good entry and exit points for trades.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Trend channels are created by drawing parallel lines along the angle of an uptrend or downtrend. The upper line marks resistance and the lower line marks support. Channels with an upward slope are considered bullish, while downward sloping channels are bearish. To create a channel, draw a parallel line touching the most recent peak or valley. Price touches of the lower line can indicate buying opportunities, while touches of the upper line may indicate selling opportunities. Channels provide areas of support and resistance to help determine good entry and exit points for trades.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    30 views4 pages

    G1-T3 Trend Channels

    Uploaded by

    The Shit
    Trend channels are created by drawing parallel lines along the angle of an uptrend or downtrend. The upper line marks resistance and the lower line marks support. Channels with an upward slope are considered bullish, while downward sloping channels are bearish. To create a channel, draw a parallel line touching the most recent peak or valley. Price touches of the lower line can indicate buying opportunities, while touches of the upper line may indicate selling opportunities. Channels provide areas of support and resistance to help determine good entry and exit points for trades.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Trend Channels

    If we take this trend line theory one step further and draw a parallel line at the same
    angle of the uptrend or downtrend, we will have created a “channel”.

    No, we’re not talking about ESPN, National Geographic Channel, or Cartoon
    Network.

    These channels aren’t television channels, they’re trend channels, sometimes also
    called price channels.

    Still, this doesn’t mean that you should walk away like it’s a commercial break.
    Channels can be just as exciting to watch as Tiger King or Keeping Up with the
    Kardashians!
    Trend channels are just another tool in technical analysis that can be used to determine
    good places to buy or sell.

    The upper trend line marks resistance and the lower trend line marks support. So
    both the tops and bottoms of channels represent potential areas
    of support or resistance.

    Trend channels with a negative slope (down) are considered bearish and those with
    a positive slope (up) are considered bullish.

    1
    To create an up (ascending) channel, simply draw a parallel line at the same angle as
    an uptrend line and then move that line to a position where it touches the most recent
    peak. This should be done at the same time you create the trend line.

    To create a down (descending) channel, simply draw a parallel line at the same
    angle as the downtrend line and then move that line to a position where it touches the
    most recent valley. This should be done at the same time you create the trend line.
    When prices hit the LOWER trend line, this may be used as a buying area.

    When prices hit the UPPER trend line, this may be used as a selling area.

    Types of Trend Channels


    There are three types of channels:

    1. Ascending channel (higher highs and higher lows)


    2
    2. Descending channel (lower highs and lower lows)

    3. Horizontal channel (ranging)

    Some traders prefer to use the terms “rising channel” for an ascending channel and
    “falling channel” for a descending channel. Most likely, Millenials.

    Important things to remember about drawing


    trend channels:
    When constructing a trend channel, both trend lines must be parallel to each other.

    Generally, the bottom of the trend channel is considered a “buy zone” while the top of
    the trend channel is considered a “sell zone”.
    Like in drawing trend lines, DO NOT EVER force the price to the channels that you
    draw!

    A channel boundary that is sloping at one angle while the corresponding channel
    boundary is sloping at a different angle is not correct and could lead to bad trades.

    When this happens, this chart pattern is no longer a trend channel but a triangle.
    (which you will learn about more later).

    That said, trend channels don’t have to be completely parallel. Nor does 100% of price
    action have to fit within the channel.

    A common mistake many traders make is that they only look for textbook price
    patterns.

    They miss important information about price action and close their eyes to other
    important clues.

    3
    Notice the channel drawings below…

    Do they look perfect? 👀

    Waiting for picture-perfect textbook examples won’t help you in the real world
    because it’s going to be pretty rare to see price action that fits perfectly within two
    perfectly parallel trend lines.

    It’s like trying to find the perfect man or woman in the real world. Once you find that
    person, don’t let go. 😭

    You might also like