As we talked before about trends – going up, going down, and sideways, these can all be channels as well.
Basically what a channel is, is where the pivots make a perfect channel between each other.
When it is a channel going up or going down, these can be great to trade. It is showing that the trend is continuing.
However, when we have a sideways channeling market, this is where you would need to be super cautious, unless it is wide enough for you to trade. But usually, a sideways market means consolidation, indecision and can be a place where traders lose all their winnings from the day and then some.
Related Read: Day Trading Vocabulary
Below are examples of channeling markets so you can see what they mean.
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