Parallel Channels Part 1

Parallel channels provide multiple potentials for trade setups and can even add to confluence.

When the market is trading in a sideways range, these are often great opportunities to recognise a parallel channel.

Many inexperienced traders will become impatient during consolidation phases and attempt to guess a breakout before it occurs. Thus, they lose money.

Accepting the current trend for what it is and not what you want, is more important.

When you have a level of awareness that reflects an experienced trader, you will be able to identify patterns such as channels and actually trade them.

Channels are effective for removing biases, and they can be traded for both day trade and swing trade positions.

Once a channel has been established we can trade it until the range breaks.

Of course, channels are not solely appointed to sideways ranges, there are also opportunities to establish sloping channels for bullish and bearish trends.

Time Stamps

3:58 – ENJ Previous COTW (DO NOT TRADE THIS)

11:03 – PARALLEL CHANNELS

• They can remove biases
• There can be some deviations
• Should be at least 4 touches (2 top, 2 bottoms)
• Neutral pattern, you have to see the overall trend, etc.
• When it breaks, you see an increase in volume.
• DAY-TRADE CHANNEL (1H): 
• Daniel takes 50% profit in the middle and moves SL to break even. If there is a sign of strength (trend change) he would compound with 30% and aim for the top. When the price goes back to the bottom of the channel after only reaching midpoint Daniel just adds 5-10%.
• SWING TRADE CHANNEL (1W):
• You hold the position for a longer time and close completely (or majority) in the middle of the channel (resistance).

28:25 – SIDEWAYS / SLOPING CHANNEL

• Entries for bull/bear channels are 0.382 or the breakdown of the channel support for bear channel and breakup of the channel resistance for bull channel
• You need 3 points, on the third touch there should be some support holding
• SL depends on MS (one has to look for relevant points on the chart)
• Daniel likes to trade them on 5min

33:53 – EXAMPLES 

1:12:30 – BTC TA and Q&A

EXAMPLE: BONUS VIDEO 8