Written by Robert McKinley

Forex Channels

OK, this is a short but informative continuation of the larger topic, “Support and Resistance.” The preceding lessons under that topic were: Support and Resistance, Trends in Forex Trading, and Trend Lines. You should be familiar with the material in those lessons before you continue.

In the previous lesson, Trend Lines, I emphasized the importance of drawing trend lines correctly and gave an example of how that is done. Now I will add another dimension to “trend line theory” and briefly talk about something called “Channels.”

If you draw a line at the same angle and parallel to both the up trend lines and down trend lines, you will have created channels.

In other words, you are drawing additional lines on the opposite sides of the up trend lines and the down trend lines.

To better visualize this, take a look at the two charts, below. The first one is the chart we used in the previous lesson, Trend Lines, and the second chart is basically the same chart with the additional lines added that were described above.

Chart with trend lines.

Chart with channels.

Click here for a final Review of Support and Resistance.