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Old 31-12-2012, 09:21
jimmysergill jimmysergill is offline
Level IV Lasers Member
Join Date: Oct 2012
Posts: 190
Default How to Use Price Channels ?

In a trending market, a price channel can often be drawn between two parallel support and resistance levels. The key to this price channel is that the lines be drawn parallel to each other and the value of the price channel depends on that.
Unlike trend lines, price channels should not be forced on a chart where they are not quickly apparent.
How it works is this… once a trend line is established, draw a duplicate line parallel on the chart. Then move it up to the relative highs above or down to the relative lows below the trend line.
If two or more fit with the line, then you may have located a valid price channel. Otherwise the market maybe too volatile – even in the middle of a strong trend, to plot a price channel.
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