We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • RT @YuanTalks: #China confirmed 1749 new cases of coronavirus, taking the total number of confirmed cases to 74,185 as of Tue, and the numb…
  • The $NZD may default back to the dominant downtrend against its US counterpart after a seemingly spirited recovery has ground to a halt. Get your market update from @IlyaSpivak here:https://t.co/LX4J53SnHQ https://t.co/O1ST0E4tQE
  • LIVE NOW: In this session, Currency Analyst @ddubrovskyFX discusses traders' positioning as a key element of market analysis to determine the prevailing and future price trends. https://www.dailyfx.com/webinars/998956395
  • About to start, join below! https://t.co/gYxr3QbMux
  • 🇦🇺 AUD Wage Price Index (YoY) (4Q), Actual: 2.2% Expected: 2.2% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-02-19
  • The #Euro may have more room to fall versus its major peers such as the US Dollar, Japanese Yen and British Pound. What is the technical picture of EUR/USD, EUR/JPY and EUR/GBP? Find out from @ddubrovskyFX here:https://t.co/M6fLA9g3BK https://t.co/UcnG7bHJ9w
  • LIVE IN 30 MIN: In this session, Currency Analyst @ddubrovskyFX discusses traders' positioning as a key element of market analysis to determine the prevailing and future price trends. https://www.dailyfx.com/webinars/998956395
  • Heads Up:🇦🇺 AUD Wage Price Index (YoY) (4Q) due at 00:30 GMT (15min), Actual: N/A Expected: 2.2% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-02-19
  • The US Dollar rally may extend on technical signals. The Japanese #Yen rose with #gold prices as #coronavirus fears sank equities across the globe, leaving investors on the edge again here - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/02/19/US-Dollar-Uptrend-May-Prolong-Yen-Gains-as-Equities-Fall-Globally.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/wDGBH3hLcb
  • RT @lisaabramowicz1: China’s economy was likely running at just 40%-50% capacity last week: Bloomberg Economics https://t.co/zkRkm5VzxU
Price Channels:  How to Trade with Price Channels

Price Channels: How to Trade with Price Channels

2011-10-11 21:59:00
Richard Krivo, Trading Instructor
Share:

Price Channels: How to Trade with Price Channels

When Price Channels are placed on a chart, they identify the high and the low price at which the pair traded over a specified period of time. The Channels on the Daily chart below are set to 20 periods so they represent the high and the low at which the pair traded over the previous 20 days.

As such, they can be used quite effectively to visually identify levels of Support and Resistance on a chart. Also, the channels are often used by “breakout” traders to identify entry levels.

Take a look at the example below of Price Channels on a chart…

Price_Channels_How_to_Trade_with_Price_Channels_body_cadjpy_dnc.png, Price Channels:  How to Trade with Price Channels

The lower channel line represents support while the upper channel line represents resistance.

As mentioned above, these channels can be put to good use by traders who employ a “breakout” trading strategy.

A breakout strategy consists of buying a pair that breaks above resistance in an uptrend or selling a pair that breaks below support in a downtrend. Since the price traded above the previous high or below the previous low, the pair is said to have “broken out” beyond its previous levels. When the breakout occurs, this can be taken as an entry signal as the potential exists for price to continue to move in that direction for a period of time.

Another effective way that the channels can be used is to identify a strong uptrend or downtrend. For example, take note of the red candles in the lower right hand corner of the chart. As they are “hugging” the lower channel line as they move lower, we have another visual cue that price is moving lower. If the candles were hugging the upper channel line in the same fashion, we would be using the channels to identify an uptrend.

Additional Resources:

Support and Resistance

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.