WaveTalks - Nifty: Channel Trading Strategy WaveTalks - Nifty: Channel Trading Strategy
There are three (3) types of channels:
1. Ascending Channel (higher highs and higher lows)
2. Descending Channel (lower highs and lower lows)
3. Horizontal Channel (ranging)
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Ascending channel
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An Ascending channel is a pattern formed from two upward trendlines drawn above and below a price representing resistance and support levels
The ascending channel is also known as a “rising channel” and “channel up“.
Ascending channel has a rectangle shape (Current Case – Nifty / 20th Oct2021)
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Trading Strategy
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As long as prices remain within the ascending channel, the upward trend in price can be expected to continue.
3 Supports shown as 17613 – 1st Support / 17864 – 2nd Support / 18209 - 3rd Support
When executing trades based on a trendline, it is important that the trendline is a valid one / How do you know it is valid – 2 points required to draw a trendline & 3rd point which is 18209 if falls & takes support then it confirms that the trendline is a valid one.
So, Any Buy or Long Trades should be executed with stops below the trendline so 18209 is an important level. Traders can keep 18200 level which is a psychological level.
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Descending channel
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A Descending channel is a pattern formed from two downward trendlines drawn above and below a price representing resistance and support levels.
The descending channel pattern is also known as a “falling channel” or “channel down“.
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Horizontal Channel
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A horizontal channel is a chart pattern formed from two parallel trendlines drawn above and below price representing resistance and support levels
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The Last Idea - Bulls Yelling The Excitement - Gap Strategy
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Hope you enjoyed selling at the tops 18600 for 18200 approx. Nifty Index took support in the 2nd Gap. Are You Ready for the Next Move?
