• Trading Systems

  Horizontal Price Channel Forex Trading Strategy

  Posted by MQ177 on 2023-03-17 at 9:24 pm

  Forex Strategy for horizontal price channel trading When the forex market channels horizontally, this is what it means. This means that the price moves sideways.

  What is a Horizontal Price Channel and How Does It Work?

  Horizontal price channels occur when the market is trending but then starts to move sideways for a period.

  Two forces are present in a horizontal forex price-channel situation: resistance and support. So what you will see is the price being restricted from moving outside this channel by the resistance and support zone.

  The price will eventually break out of the horizontal channel.

  Here’s a chart giving you an example of a forex horizontal price channel on the USDJPY:

  

  Strategy Trading Parameters

  • Currency MT4 Pairs To Trade?

  Forex horizontal price channel forex trade strategy is available to trade any currency pair.

  • What timeframes are required?

  You can use the timer from 1 minute up to the monthly.

  • Are there any other Forex indicators?

  This forex trading system does not require any forex indicators.

  But you need a good knowledge of reversal candlestick patterns to allow you to take buy or sell trades when those reversal candlesticks give the signals.

  Trading Rules For Buy & Sell

  1. When you notice the price moving sideways, draw two parallel lines on your chart. This creates your forex horizontal price channel. These can sometimes be lines of best fitting, while other times you can use the two charts swing high or swing low peaks to guide you through the channel.
  2. Then wait for the price of the two lines to reach the line
  3. To sell when the price reaches the top, look for bearish candlesticks. Placing a pending stop order to sell 2-3 pip below the low of the bearish chart candlestick, and a stop loss(SL), at least 5-10 pip above the high of bearish reversal charts candlestick candlestick. You can also place a pending sell stop order 2-3 pip above the top of the bullish candlestick pattern. Your stop loss should be placed 5-10 pip below that low bullish reversal chart candlestick.
  4. Take profit(TP) at the opposite end of the Forex horizontal price channel. This is your target level for take profit(TP).

  

  Advantages of the Horizontal Price Channel Forex Strategy

  1. When a trade does not turn out as expected, there is a reasonable risk to reward ratio (R:R).
  2. Forex trading is easy if you are able to identify the channel early enough and take advantage.

  The Horizontal Price Channel Forex Strategy Strategy has its disadvantages

  1. It’s difficult to know if the chart you see is a forex price channel formation.
  2. There’s also the problem of defining the forex price channel area to draw your two horizontal line because the price can often spike out of the zones and then fall back into it.
  3. Just because you can draw lines does not mean that the price will respond to those lines. The price can move down or up, but it can also come close to the lines.

  MQ177 replied 1 year, 6 months ago 1 Member · 0 Replies
• 0 Replies

Log In to Reply