@cyberbash Yes, there are times when a 'normal' trend channel...

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    @cyberbash

    Yes, there are times when a 'normal' trend channel just will not fit the price action very well, but interestingly (perhaps strangely), a 'reverse' channel often frames the price action very nicely.
    And yes, it is often when the price action become steep, that a reverse channel will work, when a normal channel won't.
    Also note that when a reverse channel is drawn. It is normally drawn with dotted or dashed lines, to differentiate it from a normal channel.

    For a 'normal' uptrending channel, you would use two lows points, and the corresponding high in between the two lows, to draw the channel.
    But to draw a reverse channel, you would use to high points, and the corresponding low.

    and the same for a downtrending channel, normally you would use two highs, and the corresponding low.
    And for a reverse downtrending channel, you would use two lows, and the corresponding high.

    Here are some charts to illustrate the differences.......
    Firstly a normal up channel

    UpTrending Channel.png


    and a normal down channel

    DownTrending Channel.png

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    and here is the same chart with three different channels on it - two normal channels, and then a reverse channel.....

    First one is using the most obvious points, but has the price action drop right out of the channel at the lows.

    Reverse channel 1.png


    and the second normal channel starts later in the trend, but the price action does not hit either the supply or demand lines of the channel.

    Reverse Channel 2.png


    this reverse channel (with dashed lines) shows many touches of the demand line, and the failure to touch the supply line at the highs shows the inherent weakness. Then the breakout from the channel shows a very nice re-test (or backtest), before price accelerates away from the channel.


    Reverse channel 3.png


    hopefully all that helps.....


    X6.1.png
    Last edited by Jako8557: 07/05/16
 
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