Channels in technical analysis

Channels are formed by drawing a line parallel to the theoretical trend line, be it bullish or bearish. Channels are a significant part of trend analysis and are very often used to set take profit levels and stop-loss levels as well as to set breakout levels and start of new trends.

Draw a bullish channel: During an uptrend, draw the trend line as we saw in the previous section. This line will join the lows. Now draw a parallel line that joins the highs or peaks, the bullish channel is already formed !!

To draw a bearish channel, perform the same operation, draw the downtrend line, and draw another parallel line joining the lows.

Likewise, lateral channels can be drawn when the trend is lateral.

Side channel

Téncio Forex analysis, lateral trend channel.

Bearish channel

Forex technical analysis, downtrend channel.

Bullish channel

Forex Technical Analysis, uptrend channel.

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