The Horizontal Price Channel Forex Trading Strategy is a trading strategy that is based on a price structure called a trading channel and it is used by all levels of traders-including beginning Forex traders.
To form a horizontal price channel, price action changes from a trending market into a market that is consolidating sideways.
Price action begins to plot an obvious support level and a resistance level. Given that markets spend most of their time consolidating (called a trading range) in a horizontal price channel, learning to trade price channels is a great addition to the toolbox of any trader – swing trader, day trader, and even position traders.
Keep in mind that on the trading time frame a trend may not be evident, horizontal price channels, as price traders from support to resistance and back again, can setup great trending trades on lower time frames. This is one reason why every trader should consider a multiple time frame trading approach.
What is A Horizontal Price Channel
Traders should know what a trending market looks like – the price action pattern of higher highs and higher lows for an uptrend – reverse that for a down trend.
A horizontal price channel may make the same trending pattern but it is done so with an obvious support and resistance zone. When price movement comes close to either extreme, price rejects and heads in the opposite direction.
Price Channel Pattern Forex
You can see that price appears random inside of the price channel. For the most part, taking trades anywhere but the extremes of the channel can make for some painful trading. This is a one hour Forex chart so price looks more erratic. A daily chart will look more contained.
To form a horizontal price channel, price action changes from a trending market into a market that is consolidating sideways.
Price action begins to plot an obvious support level and a resistance level. Given that markets spend most of their time consolidating (called a trading range) in a horizontal price channel, learning to trade price channels is a great addition to the toolbox of any trader – swing trader, day trader, and even position traders.
Keep in mind that on the trading time frame a trend may not be evident, horizontal price channels, as price traders from support to resistance and back again, can setup great trending trades on lower time frames. This is one reason why every trader should consider a multiple time frame trading approach.
What is A Horizontal Price Channel
Traders should know what a trending market looks like – the price action pattern of higher highs and higher lows for an uptrend – reverse that for a down trend.
A horizontal price channel may make the same trending pattern but it is done so with an obvious support and resistance zone. When price movement comes close to either extreme, price rejects and heads in the opposite direction.
Price Channel Pattern Forex
You can see that price appears random inside of the price channel. For the most part, taking trades anywhere but the extremes of the channel can make for some painful trading. This is a one hour Forex chart so price looks more erratic. A daily chart will look more contained.
