Forex Chennels

Posted by: | Posted on 11:20:00 PM | Post Categories

If we take the trend line theory one step further and draw another line parallel to the uptrend or downtrend line, a channel will be created.

Channels are another tool of technical analysis that helps us to determine the best price to buy or sell.

To draw an upward channel, draw a line parallel to the uptrend line and connect it to the recent bottom points. This line should be drawn while drawing the trend line.

To draw a downward channel, you need to draw a line parallel to the downtrend line and connect it to the recent top points. This line should be drawn while drawing the trend line.

When the price hits the bottom trend line, you can buy. And if the price hits the trend line above, you can sell.

Channel 3 types:

   → Upward channels (higher highs and higher lows)
   → Lower channels (lower highers and lower lows)
   → Parallel or sideway channel (ranging)

 

 



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