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If we take this trend line theory one step further and live a parallel line at forex same angle of the uptrend or downtrend, we will forex created a channel. Channels are just another tool news technical analysis which can be used to determine good places to buy or sell.
Both the tops and bottoms of channels represent potential areas of support or resistance. To create an up ascending channelsimply draw a parallel line at the same angle as an uptrend line and then move that line to position where it touches the most recent peak. This should be done at the same time you create the trend line. To create a down descending channel live, simply draw a parallel line at the live angle as the downtrend line and forex move that line to a position where news touches the most recent valley.
When constructing a channel, both trend lines must be parallel to each other. Generally, the bottom of channel is considered a buy zone while the top of channel is forex a sell zone. Like in drawing trend lines, DO NOT EVER force the price to the channels that you draw! A channel boundary that is sloping at one angle while the corresponding channel boundary is sloping at another is not correct and could lead to bad trades.
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It also illustrates how short-term funding requirements can be met.
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