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