Trading channels are easy to understand and they are even more effective than trend lines. In order to build a trading channel, you need to draw two trend lines on your trading chart – one under it and one over it. that way you are going to be able to see when trend is hitting breakout points on both directions in the trend.
Trade channels in trend brekout.
Remember, that in order to draw a perfect trend line you need to connect at least two highs and/or lows. The same applies towards trading channels.
How they can help us in trades with trends? The same way trend lines can. You wait for the chart to approach and hit one of the lines and then watch one of the many trading indicators that we talked about.
Trading channels can actually be very helpful in seeing breakout as you are going to be following both sides of the trend and it is doubtful that you can a thing with that.
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