Trend line & Channels types

Baazex
/ December 10th, 2018
Tools for Charts

Trend line & Channels types

Trend line:

A line which is used to connect two or more highs or two or more lows in the graph, with the lines expected into the future is called the trend line. It is a basic tool which is used to understand the market trend. You can use the trend line with other tools for efficient prediction.

Channel:

When you draw a parallel line at a similar angle of a downtrend or uptrend line, you have created a channel. Channel is also used for the market analysis to help out finding the best time to hold a trade. It provides a better structure as compared to the trend line.

There are three types of channels:

Ascending channel:

When you draw an uptrend line then draw another parallel line at a similar angle as an uptrend line is drawn and complete the line to its endpoint which is the most recent peak.

Descending channel:

When you draw a down-trend line then draw another parallel line at a similar angle as a downtrend line is drawn and complete the line to its endpoint which is the most recent valley.

Horizontal channel:

Trend lines that connect variable pivot lows and highs to show the price which is contained between the lower line of support and the upper line of resistance.

 

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