Channel trading.

The price of a Forex currency pair never moves in a straight line; it rises and then falls again, forming new highs and lows.

It is precisely this specific trend movement that makes it possible to create a price channel that can be used to formulate a Forex strategy.

Channel trading allows you to immediately get a more complete picture of the market and assess potential price reversals.

In the classic version, a channel is constructed based on minimum and maximum points; the minimums are used to construct a support line, while the maximums form the basis for a resistance line. These two lines form the boundaries of the price channel.

Nowadays, few traders build channels manually using the technical tools of the trading terminal. It's much easier to use a trend channel indicator or another similar tool, which you can select in the indicators .

The result is a ready-made channel whose width varies depending on the time frame and settings entered. After that, you can begin trading within the channel.

This type of trading is quite simple, the main thing is to be able to build a more or less clear channel.

Trading is carried out according to the following rules:

• Determine the direction of the trend - it is clearly visible by how the support and resistance lines .

• Buy - uptrend, reversal at the support line.

• Sell - downtrend, price reversal at the resistance line.

• Breakout of one of the channel boundaries - wait until the price moves at least 20 points, then open a trade in the direction of the breakout.

When using price channel trading, it is a good idea to track the events that caused a particular movement; this can be done by installing a news indicator .