10
Drawing Channels
Why am I talking about this?
What we need to understand here first is that MMs tend to trade in Channels, not every MM has the time to be trading 24/7, they have bots to do it for them. They also have certain take profit zones which may or may not coincide with channels. There are many channels existing in the charts, the key is to find the right one. There is no formula to this, just trial and error. This is unless you can code a bot to find it for you. PM me if you can do that.
Now, how do we draw channels. Normally, people would recommend with lower time frames, and slowly move up after drawing parallel channels. However, I do it in a dumber way due to my own laziness in trying. I start out with the daily to make a daily channel set, trying out from wick to wick and cloning it over the whole chart to find how effective the channel has been. swing low to swing low or swing high to swing high.
The key is to be patient in this process. There can be multiple channel sets. Some channel sets have a pair (up and down), some do not. So, don't be upset if you cannot find a pair. I do three tests on different wicks to see whether they line up. If not, I scrap them and find a new one. I try to make sure the channel can work spanning a few months before I try to find a new one. Btw, channels can be really close by sometimes, so there is no need to worry about the distance. Moving on, I go to the 4h and 1h timeframes based on your preferences to redo the process. Now, to trade channels solely can work sometimes if you truly have good channels. If not, it is best you continue to find confluence to trade in channels. How do I trade? I trade with confluence as well, but sometimes I just trade the channels if we are consolidating on certain lines. I kind of think that different ranges have different channels. And each range might have 1 or 2 sets of channels depending on which MM is more active. If there is a more active MM than the other, i turn off one of the channel sets. I do not delete predefined channels, I recycle them to see whether this channel still exists in future.
Like currently, the orange channel set I have been using on predicting theoretical tops and bottoms belongs to a range back in 20k to 30k. So far, it has been pretty reliable and I am not seeing a need to turn them off, swing trading through the channels can be pretty relaxing, especially when there is plenty of confluence to guide us on our decisions.
Besides that daily time frame channel, I have a 1h time frame channel set. which I use for either scalping or day trading. It works particularly well with exchange pivots and fibbonaci retracements.
There are downsides to using channels as in when they break the channel set, there is a need to continue looking for more and updating them along the way. They are not a foolproof way for trading but can be used as a guide on certain decisions.
I don't have much to say about channels because I am in a way biased in this topic as I have only relied on channels to trade to a certain success.
Do feel free to comment and correct me on the ideas.
If you are looking for a platform ot trade on, I recommend bybit for their amazing UI. Sign up here for additional rewards.
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I have some friends who are also currently teaching TA in discord groups. Come join them.
https://discord.gg/wbkt8kYJpA
I also do bot trading as a side income. If you are interested, dm me on Discord, Nej#6437 or you can join this discord and ping me.
https://discord.gg/TRdZ3qhJp4
