The channel is a powerful chart pattern for trading. Channels combines several forms of technical analysis to provide traders with entry and exiting points as well as risk control.
In this training, I will explain one of the simplest trading strategies called " Trend channel trading strategy ".
Please note, this post is a summary of this strategy and I only mention its main points.
😏
Types of channels and best for this strategy
A channel consists of at least four contact points because we need at least two low points to connect to each other and two high points to connect to each other. In general, there are three types:
**Tips:
1- Macro channels are made of Mini channels, and Mini channels are made of Micro channels, However, it is only an estimate and may not always be accurate, and they are Not the main rules and condition for Identifying channels or drawing them.
2- There is no special formula or law for naming the channels according to their time frames with these names (Macro, Mini and Micro) and you can use any time period for any type of channel.
Trade Reliability
Conformations represent the number of times the price has hits the channels trend lines and rebounded from the top or bottom of the channel. These are the important confirmation levels to remember:
1-2: Weak channel (not tradeable)
3-4: Adequate channel (tradeable)
5-6: Strong channel (reliable)
6+: Very strong channel (more reliable)
**these numbers are just for each one of trend line (up line or down line of channel).
I will write the continuation of this tutorial in the comments of this post. 😎
In this training, I will explain one of the simplest trading strategies called " Trend channel trading strategy ".
Please note, this post is a summary of this strategy and I only mention its main points.
😏
Types of channels and best for this strategy
A channel consists of at least four contact points because we need at least two low points to connect to each other and two high points to connect to each other. In general, there are three types:
- Channels that are angled up are called ascending channels.
- Channels that are angled down are descending channels.
- Channels in which the trendlines are horizontal are called horizontal channels, range channels, trading ranges, rectangle channels.
- Macro channels, which are made with 12-Hour time frame, daily time frame and above.
- Mini channels, which are made with a time frame from 1-Hour to a maximum of 12-Hour.
- Micro channels, which are made with time frames of less than 1-Hour.
**Tips:
1- Macro channels are made of Mini channels, and Mini channels are made of Micro channels, However, it is only an estimate and may not always be accurate, and they are Not the main rules and condition for Identifying channels or drawing them.
2- There is no special formula or law for naming the channels according to their time frames with these names (Macro, Mini and Micro) and you can use any time period for any type of channel.
Trade Reliability
Conformations represent the number of times the price has hits the channels trend lines and rebounded from the top or bottom of the channel. These are the important confirmation levels to remember:
1-2: Weak channel (not tradeable)
3-4: Adequate channel (tradeable)
5-6: Strong channel (reliable)
6+: Very strong channel (more reliable)
**these numbers are just for each one of trend line (up line or down line of channel).
I will write the continuation of this tutorial in the comments of this post. 😎