How to Make Money using Channel Pattern |.Swing Trading - YouTube

Hello friends, my name is Rajan

We had seen about triangle pattern on our previous video

this is a technical analysis series

So watch it from first, I'll provide the links below

Firstly, we had learnt about candlesticks

then about triangle pattern

and in this video we are going to talk about channel pattern

We will see about entry, exit, target and stop-loss

Before we start, please like and share this video

Let me know in the comments if you have any doubt or if you had taken any trades using triangle pattern

Welcome back friends, we are going to talk about channel pattern now

Channel pattern is a very simple concept

Channel pattern appears more frequently in market than triangle pattern

its the same concept

the difference between triangle and channel pattern is that

In triangle pattern there will be pressure on both the sides

sellers will give pressure on lower price

buyers will give pressure at higher price

but there won't be that aggressiveness in channel pattern

Either channel pattern can be like this

else like this

or it can even be horizontal, it can any way

First lets see about normal patterns

lets take horizontal pattern

lets assume this level as 100

and assume this as 200

so this is 200 and this is 100

there is equal pressure on both sides, that is, they buy at 100

and sellers sell only at 200

there is equal pressure both the sides

when there is a breakout, we buy here

when there is a breakdown, we sell here

so this is the concept

it is a simple concept, it won't be complicated

some times what happens is that

there will be a lot of support points

there will be a lot of support points

but at the top it will be uneven

so for pattern like this, you need not draw resistance

when it is uneven at top, draw support at bottom and join it, that is what we call as trendline

If we draw only one line at bottom, it is called trendline, if we draw both support and resistance it is known as channel pattern

we can also say the support as bottom trendline and resistance as top trendline

This wont be exactly the same in real market scenario

so this is the chart of Bajaj Auto

It wouldn't be easy for beginners to find patterns, but as you draw patterns it will get easier for you

I can find a pattern without even drawing it, because I have 4-5 years of experience

You can learn it in 3-4 months, probably even 1 year

It depends on how much homework you put in

I have seen a lot of people who have been in stock market for 10 years

but still they won't be able to draw pattern

so you can become a pro in 6 months

or be a beginner even after 10 years, it depends

as of what I have seen from my community, it takes around 3 months

it takes minimum 3-6 months to draw good patterns

so this is the channel pattern

There is a good resistance at the top

and good support at the bottom

so we connect it

this is the breakout and we buy here

we put our stop loss here

look at the move, which is around 30%

which is more than enough, we got 30% in 1.5 months

its almost 2 months

30% in 2 months is really high

this is the example for channel pattern, there is another type which is

expanded channel pattern

expanded channel pattern is the exact opposite of triangle pattern

buyers prefer to buy at a lower price and sellers prefer to sell at a higher price

for triangle pattern its the opposite, the sellers

Like if they sold at 50 last time, they will at 40 next time

Here it is the opposite, if they old at 50 last time, they will sell at 60 next time

this pattern is little tricky to trade because

after expanding a lot you can't buy after a breakout over here, because this itself is a big move

So use channel pattern for now, this pattern

is little tricky, there are chances you might lose money, I'll explain it in future

I traded Grinewell Norton recently

this is an example of expanded channel pattern

another main doubt here is that

when I first started my YouTube channel, lot of them asked me why I draw patterns based on close price

everyone used to draw based on wicks like this

I got lots of comment saying that I'm drawing wrong

that I shouldn't draw based on close price

and to draw wick based and not body based

that is their preference

my preference is close based

If I draw based on close, I will get many touch points

So if you touch a lot of candle when you draw a pattern, then it is a good pattern

if I draw based on wick then its just one or two candles

this chart is an exception

for other charts if I draw wick based I can touch only 1 or 2 candles

If I draw close based then there will be more touch points

so more touch points means better pattern

Now after a year, lots of people had started to draw based on close

but when I started only very few were drawing based on close

90% people were drawing wick based

I prefer close based

I'm telling this with my experience

If you want to draw wick based then go ahead, there is nothing wrong

Sorry I wouldn't say nothing wrong, its wrong, but still its your choice

Over here if I draw wick based look how the pattern changed

same if I draw close based, see how much candles I can touch

I believe that close based pattern is correct

But theoretically, in books, they will teach about wick based patterns

but this is my preference

I would've posted about this trade in my TheMadrasTrader YouTube channel

after the initial breakout it formed a triangle pattern

see how beautiful it is

I had bought here, I would've explained it in the video, check it out

lets see auro pharma in weekly timeframe

so this pattern had been forming since 2015

so its almost been 6 years

if the there is a breakout in such pattern then it is a good thing

and if there is a breakout it doesn't mean it will only go up

there will be some twist for sure, it will provoke our emotion and only then it goes up

its is very rare for it to go high immediately after breakout

Let it be triangle pattern or any other pattern, it won't be rule based

even in this channel pattern there will be some twist, that is stock market

if it occurs perfectly, then everyone would have been rich by now

there will be some difference

you have to be holding in that moment

for example, lets take auro pharma

I put this pattern in my English channel before it had a breakout

If you had seen it , the you would've known

I think I posted when the price was around here

So we would've bought here

it has gone a little up

look at this, for almost 2 months it fell by 17%

you should be holding it for 2 months, it will be easy to say but its really tough

but in those 2 months, other stocks might be going up and still you should hold this trade

so this is where most people would give up

look how many times it has tested here, mostly everyone would have placed their stop losses below the trendline

for 1.5 months it was moving close tot he trendline

70-80% of people who bought it here would have given up

so you have to hold it even here

you will get it only through experience

it will really difficult for people who put in their entire capital on this trade

if you have 1 lakh you have to put only 5% in a single trade, that is, 5000

but no one will follow it

so that is why they can't hold

so I bought after breakout

and I'm holding till now

lets see how many days I've been holding

almost 9 months

no, its 10 months

I bought it last October

I think its July

I'm not sure when I bought it, but I'm still holding on to it

look at the second pattern here

when you were relieved that it went up, then it suddenly fell for 1.5 months

lots of traders would give up at this moment and

you will get to know all these with experience

ok lets move on to our next stock Granules

this is a perfect example, there is 5 resistance

and 3 support

we can join it like this

and there was a breakout and look at the twist

it had a breakout and went for retest

it had a gap down in retest and then it went up

so most of them would have put their stop loss here, it was hit and then went up

after their stop loss was hit, then would not want to enter again

look at what happened after

it has moved 150%

as I said everything would not be very easy and simple

and there will be some twist no matter what pattern

although it is all channel patterns, every type has its own characteristics

so you can volume and get some date, data in a sense, do analysis

we will look into this advanced stuff on our course

I will not be able to explain it in a video, it changes for each stock, I would've explained this in my community

So, you can first make money from these YouTube videos

and then if you had made money with the help of my videos, then you can join the course

so this is a perfect example for channel pattern

If a stock goes up very fast

definitely it will consolidate for some time

we can't say how many days it will be in consolidation

even the institutes wouldn't know how many days it will take

that's all for channel pattern

if you guys have any doubts please let me know

don't forget to like, comment and subscribe

I'll put a separate video for support and resistance

because you might get confused if I teach it with patterns

I'll put a separate video for why I don't use support and resistance

So please wait

I myself don't know what we are going to see on our next video

So, I will update soon

thank you so much for the support

I'll see you soon