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.
Below are examples of channeling markets so you can see what they mean.
Marina 'The Trader Chick' Villatoro