The Channels indicator draws the price flow channels on the chart. But unlike a simple channel, he draws three channels at once in different time frames, and displays everything on one chart, for simplicity and clarity. Therefore, you do not need to constantly switch between periods in order to do analysis through channels.
There are two versions of this indicator ver.2_4 and ver.2_5, the difference between the last one and the first one is that the horizontal lines of red and blue are drawn from the right edges of the channel. Also on all versions of the indicator there are signatures below the lower and upper levels of the channel. These signatures also have two colors, blue and red, and indicate the price levels at which the channel ends. The upper level (resistance) is signed in blue, and the lower one (support).
Similarly, the channel lines are drawn in different thicknesses depending on the time period on which they are drawn, the older the period, the thicker the line.
Channels Technical Indicator parameters:
period1 – the lower period;
period2 – average period;
period3 – the upper period.
By default, these periods are set to 60 , 240 , 1440, respectively. These parameters are specified in minutes, by default, H1, H4 and D1 are installed, respectively. When setting the indicator on the chart, it is recommended to set the current period in minutes1 to the period1 parameter , and the other two to increment.
How to use Channels Technical Indicator
Trade in the channel in practice can be completely different and depends on the personal preferences of the trader. For example, you can use one channel for trading, or you can do it all at once. I will try to describe only two possible situations, although in practice they can be quite a lot.
We take only one current channel, and we trade from its levels, from above we sell, from below we buy. Also, be very careful about the angle of the channel’s inclination, since different angles should be followed by different tactics. For example, if the channel is almost horizontal, then you should open deals as in flat, from below – buy, from above – sell. If the channel is strongly tilted, from 40 degrees or more, the deal should be opened only in the direction of the channel, with the ascending channel only we buy from the lower border, and with the descending channel we only sell at the upper border.
The tactics are approximately the same as in Example 1 , but you should open a deal when two or three channels at different time frames point to one side, this tactic will allow you to trade on a longer-term basis and “catch” big trends.