What are Forex Trade Channels?

A trading channel is a limited trading range in which price moves over a certain period of time. The boundaries of the trading channel are limited by two lines: support and resistance. Also, like trends, trading channels are divided into 3 types: ascending; descending; sideways (flat).
We will talk about the trading price channels and methods of making profit when trading in them. First of all, let's go back to the fundamental principles of technical analysis, and let's clarify what a trading channel is. A trading channel is a limited trading range in which price moves during a certain period of time. The boundaries of the trading channel are limited by two lines: support and resistance. Just like trends, trading channels are divided into three types: ascending; descending; and sideways (flat). Let's consider each of them in details and use their example to learn how to correctly build a price trading channel.
We'll consider a channel confirmed if it touches and bounces three times (note: it's touching, not forming three price peaks), this is a very important nuance. Trading in the forex channel. Examples and Methods. The essence of trading in price channels is based upon the fact that the quote will move in the extreme channel borders and will not go beyond these borders.
Orders should be closed strictly following the rules of channel strategy - take profit or stop loss. Tools for creation of the channel. Channels in Forex can be horizontal, directed upwards, downwards or dynamic. They can be drawn on the chart manually or using auxiliary tools, such as trend lines, special tools in MetaTrader 4 Client Terminal in the Channels group, or indicators: Fig. 2. Types of channels in the MetaTrader 4 terminal.
 
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