EUR/USD has formed a rather nice sloping channel pattern on the H4 chart. It consists of only 6 trading days but the price has already touched the channel lines 6 times. During the next few days a breakout is possible.
This descending channel is 175 pips high. I would consider a real breakout if the price penetrates a level set at the upper border of the channel plus 10% of channel height (17.5 pips). In case of a breakout, I would set a target level to channel line plus channel height (175 pips). I would use a fixed
Two points to remember about this channel pattern:
- It’s an H4 chart, which means that bars’ close/open level don’t mean much.
- It’s a short term chart pattern, which isn’t very reliable. Fake breakouts are possible and it’s advised to keep your
stop-loss as tight as possible.
Below, you can see the channel chart pattern itself (yellow lines) with my breakout borders (cyan lines) and the probable pattern targets (green lines). You may click the chart image to view a
If you have any questions or comments regarding this EUR/USD chart pattern, please feel free to reply via the form below.
Can you post the channel indy you are using?
Thanks ahead.
ram
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admin Reply:
December 11th, 2011 at 1:44 pm
I can’t! It’s my eyes and hands :-). To be serious, I just draw them using the MT4 trendline and equidistant channel objects (they are standard).
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Ha! that’s what I do…
Do you agree/disagree
that you using say the H4 and Daily historical zoom outs
you can arrive at an ascending angle and descending angle
the ‘works’ for most pivots?
So that, your chart, once plotted,
gives you a series of parallel
ascending/descending trend/support and resistance lines
that tend to be respected or repeatedly tested, then broken by price action?
Your chart ends up with intersecting lines forming a ‘diamond grid’
above and below the current price action.
That by constantly monitoring/adjusting these two ascending/descending ‘angles’
you can arrive at the (almost) ‘perfect’ angle for both?
Your thots?
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admin Reply:
December 11th, 2011 at 7:15 pm
Ugh… I’ve never tried that.
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