Channels
Two parallel lines with price travelling between them. Useful not as a corridor to trade but as a map — where to expect the exit.
Channels — what it is?
A channel is two parallel lines with the move running between them. The lower one is drawn on the lows, the upper one on the highs, and price travels from edge to edge.
The classical logic says buy at the lower edge and sell at the upper one. It works right up until the channel becomes obvious to everyone.
By that point stops have accumulated beyond both edges, and a move outside the channel stops being an accident — it becomes the objective.
Channels — how it is built?
A channel is drawn on the same extremes as a trendline, wicks included. It's more useful to see it not as a corridor to trade but as a map: both edges are places where liquidity is pooled.
Channels — common mistakes
Mechanically trading the edges without looking at higher-timeframe structure.
Stretching the channel so that every candle fits inside. Then it shows you nothing.
Counting a move outside the channel as a break without a candle closing beyond the edge.
Not noticing that the channel is narrowing: that's no longer a channel but a triangle, with its own logic.
Related to
Glossary
- channel
- two parallel lines that bound the move above and below.
- point
- the minimum step of a quote, usually ten times smaller than a pip.
- trendline
- a straight line drawn through consecutive lows or highs.
- liquidity
- a cluster of pending orders and stops in a particular zone. The fuel for large capital to move.
- timeframe
- the period one candle holds: M5 is five minutes, H1 an hour, D1 a day.
- candle
- the element of the chart that shows four prices for a period: open, high, low, close.
Test yourself
Where is a pullback inside the trend, not a reversal?
Correct. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →
Not this one. The right answer is the other chart. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →