{"id":9528,"date":"2022-10-12T07:25:05","date_gmt":"2022-10-12T07:25:05","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9528"},"modified":"2022-10-12T07:25:05","modified_gmt":"2022-10-12T07:25:05","slug":"trend-channels","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/trend-channels\/","title":{"rendered":"Trend Channels"},"content":{"rendered":"\n

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 \u201cchannel\u201d<\/strong>.<\/p>\n\n\n\n

No, we\u2019re not talking about ESPN, National Geographic Channel, or Cartoon Network.<\/p>\n\n\n\n

These channels aren\u2019t television channels, they\u2019re trend channels,<\/strong> sometimes also called price channels<\/strong>.<\/p>\n\n\n\n

Still, this doesn\u2019t mean that you should walk away like it\u2019s a commercial break. Channels can be just as exciting to watch as Stranger Things<\/em> or Keeping Up with the Kardashians<\/em>!<\/p>\n\n\n\n

Trend channels\u00a0are just another tool in\u00a0technical analysis\u00a0that can be used to determine good places to buy or sell.<\/p>\n\n\n\n

The\u00a0upper trend line marks resistance<\/strong>\u00a0and the\u00a0lower trend line marks support<\/strong>. So both the tops and bottoms of channels represent potential areas of\u00a0support\u00a0or\u00a0resistance.<\/p>\n\n\n\n

Trend channels with a negative slope<\/strong> (down) are considered bearish<\/strong> and those with a positive slope<\/strong> (up) are considered bullish.<\/strong><\/p>\n\n\n\n

\"Trend<\/a><\/figure>\n\n\n\n

To create an up (ascending) channel<\/strong>, 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.<\/p>\n\n\n\n

<\/strong>To create a down (descending) channel<\/strong>, 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.<\/p>\n\n\n\n

When prices hit the LOWER trend line, this may be used as a buying<\/strong> area.<\/p>\n\n\n\n

When prices hit the UPPER trend line, this may be used as a selling<\/strong> area.<\/p>\n\n\n\n

Types of Trend Channels<\/h2>\n\n\n\n

There are three types of channels:<\/p>\n\n\n\n

  1. Ascending channel\u00a0(higher highs and higher lows)<\/li>
  2. Descending channel\u00a0(lower highs and lower lows)<\/li>
  3. Horizontal channel\u00a0(ranging)<\/li><\/ol>\n\n\n\n

    Some traders prefer to use the terms \u201crising channel\u201d for an ascending channel and \u201cfalling channel\u201d for a descending channel. Most likely, Millenials.<\/p>\n\n\n\n

    Important things to remember about drawing trend channels:<\/h2>\n\n\n\n

    When constructing a trend channel, both trend lines must be parallel to each other.<\/p>\n\n\n\n

    Generally, the bottom<\/strong> of the trend channel is considered a \u201cbuy<\/em> zone\u201d while the top<\/strong> of the trend channel is considered a \u201csell<\/em> zone\u201d.<\/p>\n\n\n\n

    Like in drawing\u00a0trend lines,\u00a0DO NOT EVER<\/strong>\u00a0force the price to the channels that you draw!<\/p>\n\n\n\n

    A channel boundary that is sloping at one angle while the corresponding channel boundary is sloping at a different <\/em>angle is not correct and could lead to bad trades.<\/p>\n\n\n\n

    When this happens, this chart pattern is no longer a trend\u00a0channel\u00a0but a\u00a0triangle<\/strong>. (which you will learn about more later).<\/p>\n\n\n\n

    That said, trend channels don\u2019t have to be completely<\/em> parallel. Nor does 100% of price action have to fit within the channel.<\/p>\n\n\n\n

    A common mistake many traders make is that they only look for textbook price patterns<\/strong>.<\/p>\n\n\n\n

    They miss important information about price action and close their eyes to other important clues.<\/p>\n\n\n\n

    Notice the channel drawings below\u2026<\/p>\n\n\n\n

    \"Trend<\/a><\/figure>\n\n\n\n

    Do they look perfect? ?<\/p>\n\n\n\n

    Waiting for picture-perfect textbook examples won\u2019t help you in the real world because it\u2019s going to be pretty rare to see\u00a0price action\u00a0that fits perfectly within two perfectly parallel trend lines.<\/p>\n\n\n\n

    It\u2019s like trying to find the perfect man or woman in the real world. Once you find that person, don\u2019t let go. ?<\/p>\n","protected":false},"excerpt":{"rendered":"

    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 \u201cchannel\u201d. No, we\u2019re not talking about ESPN, National Geographic Channel, or Cartoon Network. These channels aren\u2019t television channels, they\u2019re trend channels, sometimes also called price channels. Still, this doesn\u2019t […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[779],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9528"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9528"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9528\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}