How To Treat Price When Channeling

When trending price has the habit of doing it following a channel, an ascending or descending one. And not only when trending, but also when consolidating, sometimes the so called horizontal channels are being respected by price and specific measured move can be calculated based on it.

Because rarely price is moving in straight line to the upside or to the downside, when it is moving it has the tendency to make a low, for example, then bounce a bit, only for sellers to keep pushing it more to the downside on each pullback.
From my point of view a channel should not be treated as a fixed area, but it should be viewed as a mobile one, ever changing, and in this chapter I will show you how to update your channel based on the moves price makes, in order to have all the time the right setup for the respective move. Also breaks out of the channel lines are treated here showing you what to do when price is breaking and what are the steps to take in order to see if the break is for real, and if yes, how to draw the next channel, in the opposite direction.

This sub chapter will have two recordings with plenty of examples and the next sub chapter will deal with finding support and resistance areas given by situations when price is traveling in channels (channeling).

One more thing to add is the fact that even this seems to be a simplistic approach, keep in mind that sometimes simple things work best and here you can find just that: following a simple set of rules you cannot be left outside of the market.

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