Many traders know that trends in the market not long term, and most of the time the foreign exchange market is moving sideways or whatever it's called the state of "the flat". And the most effective in this market are the support and resistance levels, as well as channels that they form. This makes the LED channels forex one of the most popular indicators for traders. There are many strategies using these indicators, as well as various methods of construction of these channels, which have different properties and characteristics.
The first is to say that the basis of the channel in the classic sense are the support and resistance levels. And even on the upward or downward market may form the corresponding channel prices. The main strategy is to trade on the border formed by the channel, mainly in the direction of the trend. To do this is to set the indicator forex channels and when prices approach to one of the channels open a trade in the opposite side of the border. Let's take a closer look at how it looks in different conditions:
- Uplink. In the growing market of more prudent to buy from the bottom of the channel. Such a deal has a greater chance of winning, and the larger size of the potential profits. Sell the upper limit risky, as is often the case that the price is not reaching the lower limit starts to increase.
- The downstream channel. Here, everything is exactly the opposite. Preferably sell from upper border of the transaction for the purchase made only aggressive traders, as they are considered quite risky.
- The side channel. Many traders and investors try not to trade in these conditions, but in practice the trade in sideways movement can bring good profits. Usually during lateral movements in the market uncertainty reigns, and the prices are repulsed from one border to another. Here, the trader can make transactions for the sale and purchase with the same level of risk.
Now that we understand the tactics of trading forex using the indicator channels, is to provide a few specific indicators. The first and one of the most popular is the indicator Bollinger Bands. This indicator essentially formed by three moving averages with different periods. The main feature is the use of averages is that helps to smooth the strong jumps and sudden changes in market prices. I want to highlight another trading strategy that is typical for this indicator - when the price is outside of channels, and the subsequent bars are also formed at this boundary, then it's a signal to the formation of a strong movement. Transactions should open in the direction of penetration.
There is also a forex indicator channels, which allocates support and resistance levels based on the maximum and minimum prices. For the beginners it's often difficult to see for themselves the levels, so you can enlist the help of these indicators. Operation with the support and resistance levels such as we have described above.
Very popular among traders use forex Keltner channel indicator. This indicator can be called the receiver of the Bollinger Bands. Line channels are constructed on the basis of market highs and lows, for a selected period of time. The signals on the sale or purchase standard, from the top of - sale, from the bottom - the purchase. This indicator is set and the channel width, the narrow channel can be the beginning of a strong flick, and a channel indicates a high level of volatility. The indicator has a small number of settings that experience shows it's better not to change, except that the figure MA_PERIOD can be increased if you trade in the long-term use and timeframes of the day and above. To your taste, you can only change the color of the lines and their thickness.
Trade with the use of channels is the primary strategy for many traders. Channel indicators will help the beginner to identify support and resistance levels, trend direction, and a professional point of entry or exit.Social button for Joomla