The Channel Trend indicator, as it is already clear from the title, draws the trend lines of support and resistance on the chart. The current time frame draws not only channels of the current period, but also channels of older periods. Each channel of different periods has its own color, and not to get lost in them, one of the channel lines is built dotted.
Channel Trend Technical Indicator
Also on the chart there is a vertical orange line, it is necessary for the user to specify the prospective, last candle (bar) for calculation. In other words it looks like this: You move this line to this or that candle (bar) and the indicator looks for and builds channels, only up to that candle (inclusive), and all subsequent candles in calculation of the channel lines do not participate, this property helps to see the work indicator on history and make plans for further trade.
Channel Trend Technical Indicator parameters:
FirstBar – the number of the last bar when building the channel lines;
DeltaBar – the number of bars for calculating channels;
InsLine – display additional support and resistance lines.
Description of the parameters:
The greater the value of the parameter ” DeltaBar “, the more important the channel lines build the indicator, and the channels of a smaller period are simply not displayed.
How to use Channel Trend Technical Indicator
First of all, the indicator should be used when developing a trading system based on trade in a channel or on a channel breakdown. But before you start using the indicator in practice or view the history, you first need to understand the parameters of the indicator itself. These parameters will depend on your character and style of trading.
The most important parameter for tuning in this case will be ” DeltaBar “, because it helps you to draw only those channels that you need. For example, for short-term trading within a day, you should set the parameter as small as possible, therefore, for a longer-term trade, you need to set the parameter a little more.
Trading inside the channel can be very profitable, especially if you use a longer-period channel, because such channels have more force and a rebound or breakdown of the line of such a channel, gives a more accurate signal for entering a deal with a small risk, but with large benchmarks for profit, which makes trade more profitable. Similarly, to build up a profitable position, you can use the breakout of a channel of a smaller period in the same direction as your current transaction.