New week :P..sweet movement by geppy now on my chart..Hope you all find this post use full..Big credit to Ngoqs for the great source.
Channels
When prices trend between two parallel trendlines they form a channel. When prices hit the bottom trendline, this may be used a buying area and when prices hit the upper trendline, this may be used as profit taking area and vice versa.
Breakout of trendlines and support and resistance line provide good areas for buying or selling.
Channels can be upward or downward, sloping and horizontal.
Channels can be constructed from Trendlines by connecting two pivot highs or two pivot lows.
Four variations of trendlines are used to construct two variations of parallel channels;
1- connecting 2 rising or ascending pivot highs = Rising or Ascending Tops Trendline to produce Rising or Ascending Parallel Channel
2- connecting 2 falling or descending pivot highs = Falling or Descending Tops Trendline to produce Falling or Descending Parallel Channel
3- connecting 2 rising or ascending pivot lows = Rising or Ascending Bottoms Trendline to produce Rising or Ascending Parallel Channel
4- connecting 2 falling or descending pivot lows = Falling or Descending Bottoms Trendline to produce Falling or Descending Parallel Channel
2- connecting 2 falling or descending pivot highs = Falling or Descending Tops Trendline to produce Falling or Descending Parallel Channel
3- connecting 2 rising or ascending pivot lows = Rising or Ascending Bottoms Trendline to produce Rising or Ascending Parallel Channel
4- connecting 2 falling or descending pivot lows = Falling or Descending Bottoms Trendline to produce Falling or Descending Parallel Channel
The trendlines define the top and bottom of a channel which define support and resistance.
Spesial Thx to Ngoqs of Trading Naked
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