Rules are - Identify Channel -> Higher Lows and Higher Highs for Bull Channel -> Lower Lows and Lower Highs for bear Channel - Draw Structure ( Resist becomes Support and vice versa ) - Wait for 0.618 Retracement and aim for 1.618 Extension - Stops like in the Example under last Low
You could even Buy and Sell in the Channels BUT you should go with the Trend.
ALSO Check the main Trend on Daily ALSO Check Consolidation Areas, maybe its ranging on the Daily withing 1000 pips for example and you can identify Channels within the Range. (In this Example its like it on the Daily )
Last Trade in the Channel was a Winner with RR = 2.5 Now we can wait for the second one.
UPDATE : trade should go like this of course for 1.618 extension
BUT in this case. Daily Channel meets the 1.272 extension
Thats why i would go for the RR=1.97 Trade