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
GBP/USD
Mixed
USD/JPY
Bearish
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
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
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.89%, while traders in US 500 are at opposite extremes with 80.64%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HehGdVZjiP
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.06% 🇬🇧GBP: 0.04% 🇪🇺EUR: 0.03% 🇨🇦CAD: -0.02% 🇳🇿NZD: -0.06% 🇦🇺AUD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/0SmnI3T0hU
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.20% US 500: -0.22% France 40: -0.61% Germany 30: -0.63% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Yj4Ut2iXfP
  • The $AUD seems to be biased lower against its US counterpart despite sellers’ recent struggle to build lasting bearish momentum. Get your AUD/USD market update from @IlyaSpivak here:https://t.co/8yt9QURlhk https://t.co/4zKJtvpEAg
  • The $JPY has posted some rare gains against the US Dollar on its daily chart, but important channel support still holds on an intraday basis. Keep a close eye on it now. Get your market update from @DavidCottleFX here:https://t.co/ReMGzu6OjP https://t.co/3ZYnOKnDp5
  • 🇯🇵 JPY All Industry Activity Index (MoM) (SEP), Actual: 1.5% Expected: 1.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2019-11-21
  • Heads up: Japan’s All Industry Activity Index (MoM) (SEP) is due at 4:30 GMT (15 min) Est: 1.5% Previous: 0.0% #JPY
  • Heads Up:🇯🇵 JPY All Industry Activity Index (MoM) (SEP) due at 04:30 GMT (15min), Actual: N/A Expected: 1.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2019-11-21
  • Inconclusive #UK #Brexit #ElectionDebate hasn't done much for overall polling which has #Conservatives ahead. GBP markets would probably like to see #BorisJohnson 's party win, if only as he offers at least some prospect of forward Brexit movement. #GBPUSD https://www.dailyfx.com/forex/fundamental/article/special_report/2019/11/21/GBP-Holds-Up-After-Close-Brexit-Debate-Bulls-Watch-Tory-Poll-Lead-.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
  • RT @Reuters: Yen gains, yuan down as trade woes, Hong Kong strife sap risk appetite https://t.co/jOyql6g1Mr https://t.co/Biqp6upcTX
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.