Trend channel indicator – Definition and trading strategy in IQ Option

What is a trend channel?
What is a trend channel?

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Trend is always a reliable guide for you to trade and make money in IQ Option. So how about trend channel? Is it important? What is trend channel and how to trade with it? After reading this article, you will know everything about this wonderful indicator.

What is trend channel?

Trend channel (or Price channel) is formed from a straight line that is in parallel with the trend line. In particular, price will move within this trading channel.

What is a trend channel?
What is a trend channel?

Price channel has 3 types: Ascending channel, Descending channel and Horizontal channel.

Ascending channel (Bullish channel)

To create an ascending channel, simply draw another line parallel to the uptrend line. Then connect it to the nearest top. If this line connects 2 tops or more, the price is active in this ascending channel.

Key features:

• Including 2 upward parallel lines. One line is support and one line is resistance.

• Price will move up and down between the support and resistance lines of the price channel.

Ascending channel or Bullish channel

Specific examples in IQ Option

Ascending channel in IQ Option

Descending channel (Bearish channel)

To create a descending trend channel, simply draw a line parallel to the downtrend line. Then you move the new line to the nearest bottom. If this line connects 2 or more bottoms, the price is moving in a descending channel.

Key features:

• Including 2 downward parallel lines: Support and Resistance.

• Price will move up and down between the support and resistance levels of the trading channel.

Descending channel or Bearish Channel
Descending channel or Bearish Channel

Examples in IQ Option

Descending channel example in IQ Option

Horizontal trend channel

To create a horizontal price channel, only draw two parallel lines when the market hasn’t created any trend. One line connects the tops and one line connects the bottoms together.

Key features:

• Includes 2 parallel lines moving horizontally, Support and Resistance.

• Price will move up and down between the support and resistance level of the price channel.

Horizontal channel or Flat channel

The meaning of trend channels:

• To trade against the main trend in the short term with high efficiency.

• To confirm the sustainability of an ongoing trend.

Some typical signals of trend channels

Ascending channel

HIGHER = Ascending trend channel + the price touches the support level in the ascending channel. The expiration time is from 15 minutes or more.

LOWER = Ascending channel + the price hits the resistance level in the bullish channel. The expiration time is 5 minutes.

Open options in an ascending channel in IQ Option

Descending channel

HIGHER = Descending channel + the price touches the support level of the descending channel. The expiration time is 15 minutes or more.

LOWER = Descending channel + the price hits the resistance line of the descending channel. The expiration time is 5 minutes.

Enter a trade in a descending channel in IQ Option

Horizontal trend channel

HIGHER = The horizontal channel + the price hits the support line of the horizontal price channel. The expiration time is 5 minutes.

LOWER = The horizontal trend channel + the price hits the resistance line of the horizontal price channel. The expiration time is 5 minutes.

Enter a trade in a horizontal channel in IQ Option

Above are a few examples of trend channels. Thank you for following us.

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Trend channel indicator – Definition and trading strategy in IQ Option
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