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How to Trade With Price Channel Pattern Strategy + Price Breakout Trading Strategies - YouTube
Channel: Power of Trading
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hi i'm joey the price channel pattern trading聽
strategy is one of the smartest ways to make聽聽
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money trading the price channel pattern is one聽
of the most intuitive and easiest chart patterns聽聽
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this video will teach you how to implement聽
it in your day-to-day trading operations聽聽
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the good news about the price channel pattern聽
is the majority of financial instruments聽聽
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and markets trade within a price channel of at聽
least 20 to 25 of the time in order to understand聽聽
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the psychology of a chart pattern our team at聽
power of trading is working hard to put together聽聽
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the most comprehensive guide on different chart聽
pattern strategies it doesn't matter whether聽聽
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you're a scalper or a day trader if your preferred聽
time frame is the daily chart for swing trades聽聽
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the channel trading strategy will fit all of your聽
needs what is the price channel pattern the price聽聽
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channel pattern represents two trend lines聽
positioned above channel resistance and below聽聽
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channel support the price the price action is聽
contained between these two parallel trend lines聽聽
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however the biggest trading opportunity comes from聽
the price channel breakout when the price channel聽聽
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breakout happens it can produce significant聽
price movement in the direction of the breakout聽聽
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we can distinguish two types of price channel聽
patterns number one upward price channel聽聽
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number two downward price channel number three聽
sideways price channel an upward price channel聽聽
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pattern occurs when the price makes a series of聽
higher highs followed by a series of higher lows聽聽
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the price should be contained within the support聽
and resistance lines when price breaks out either聽聽
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above or below a buy or sell signal is triggered聽
an upward price channel pattern occurs when the聽聽
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price makes a series of lower lows followed聽
by a series of lower highs typically the聽聽
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price should be contained inside the lines that聽
connect these highs and lows the best trading聽聽
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opportunity comes from the price channel breakout聽
the sideways price channel pattern can be defined聽聽
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by two horizontal lines as opposed to using trend聽
lines basically when we have a consolidation or聽聽
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ranging zone where the price bounces on and off聽
between the two lines support and resistance聽聽
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using a channel trading strategy means you can聽
easily identify trade ideas for big profits price聽聽
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channel trading strategy sell rules recognizing聽
the signs of the price channel breakout in advance聽聽
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gives you the opportunity to make better trading聽
decisions our price channel trading strategy takes聽聽
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advantage of these warning signs it provides聽
you with a smart way to trade price channels聽聽
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moving forward we present the sell side聽
rules of the price channel trading strategy聽聽
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step number one draw a price channel if you聽
are able to see at least two higher highs and聽聽
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higher lows the price channel pattern is drawn by聽
connecting the highs and lows during this stage聽聽
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we're looking for distinctive price action that聽
can be contained within two parallel lines these聽聽
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lines will ultimately form the price channel聽
pattern if you're able to spot two consecutive聽聽
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swing highs followed by two consecutive two higher聽
lows you simply connect these points using the聽聽
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price channel tool the majority of the trading聽
platforms has incorporated into their default聽聽
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trading tools the price channel indicator before聽
the price channel breakout we need to make sure聽聽
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our price channel trading strategy complies with聽
one more rule which brings us to step number two聽聽
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step number two wait for a swing high to fail聽
to reach the top of the price channel pattern聽聽
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in the case of an ascending or upward price聽
channel pattern the first warning signal that聽聽
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the price will fail to trade within the boundaries聽
set by the price channel pattern presents itself聽聽
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when the last swing high point fails聽
to reach the top of the channel聽聽
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only our price channel trading strategy makes聽
use of this powerful price reading technique聽聽
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because our team at power of trading has developed聽
the early signs of price channel breakout聽聽
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the fail attempt to test again the top of the聽
price channel is a sign of price weakness which聽聽
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is confirmed when the price also fails to bounce聽
off the price channel bottom and breaks it instead聽聽
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note the more times a swing high fails to reach聽
the top of the price channel pattern the better聽聽
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the trade setup step number three wait for聽
the price channel breakout and for breakout聽聽
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confirmation one of the worst mistakes traders聽
does when trading price channel patterns is that聽聽
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they don't wait for confirmation signal when聽
the breakout happens you should always wait聽聽
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for breakout confirmation what do we mean聽
by breakout confirmation in simple terms聽聽
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we want the breakout candle to post a close below聽
the price channel bottom to confirm the breakout聽聽
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we also have training on how to use japanese聽
candlesticks so we don't just wait for the聽聽
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price channel breakout but instead we also want聽
to see the breakout candle closing below the聽聽
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price channel pattern this is a very simple way to聽
avoid many of the false breakout signals note the聽聽
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breakout candle needs to be a big decisive looking聽
candle but it's not mandatory so far so good聽聽
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now we need to define our entry technique聽
which brings us to the fourth step of the聽聽
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price channel trading strategy step number four聽
sell right at the breakout candle closing price聽聽
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the price channel trading strategy uses聽
a very simple trade entry technique聽聽
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a sell order is triggered at the breakout candle聽
closing price the price channel breakout technique聽聽
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provides us with an entry signal that you聽
can be confident in executing the trade聽聽
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the next logical thing we need to establish for聽
the price channel trading strategy is where to聽聽
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take profits step number five take profit one at聽
the 50 fibonacci retracement of the previous trend聽聽
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take profit 2 at the starting point of the聽
price channel the price channel trading聽聽
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strategy employs multiple entry techniques聽
our first potential take profit zone is the 50聽聽
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fibonacci retracement of the previous trend what聽
do we mean by the previous trend the trend that聽聽
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was contained within the price channel pattern so聽
plot the fibonacci retracement indicator between聽聽
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the high and the low of the price channel the聽
second potential take profit zone is the price聽聽
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channel starting point see in the above figure the聽
next important thing we need to establish is where聽聽
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to place your protective stop loss step number聽
six place the protective stop loss above the聽聽
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swing high prior to the price channel breakout聽
we're adopting a very conservative approach聽聽
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when it comes to the stop-loss technique simply聽
hide the stop loss above the swing high prior to聽聽
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the price channel breakout we also recommend you聽
to trail your stop-loss above the last swing high聽聽
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once you cash in on the first portion of the trade聽
note the chart above is an example of a sell trade聽聽
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use the same rules but in reverse for a buy trade聽
but this time we're going to use the downward聽聽
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price channel in the figure below you can see an聽
actual buy trade example using the price channel聽聽
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trading strategy conclusion you can use the price聽
channel pattern to profit in any kind of market聽聽
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the trading techniques highlighted in this price聽
channel trading strategy can also be incorporated聽聽
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into your current strategy as it will bring a new聽
dimension to your understanding of price action聽聽
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the early signs that a price channel breakout is聽
about to happen is when the price falls to reach聽聽
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multiple times one end of the price channel聽
pattern this is a warning to the potential聽聽
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landing of the price channel pattern if you have聽
good trading skills and you're able to spot the聽聽
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price channel pattern earlier it will give you聽
the opportunity to take advantage of the price聽聽
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bounce between the support and resistance lines聽
watch our previous price chart pattern video聽聽
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bump and run chart pattern thank you for聽
watching please leave a comment below if you聽聽
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have any questions about this strategy also please聽
give this strategy a one like if you enjoyed it
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press the bell icon on the youtube聽
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