Most Forex traders know how to draw a channel but not many know can use the information used to create the channel to find possible turning points in the market. First lets look at the traditional channel .You would first identify a trend and draw a trend line . Next you duplicate the exact angle of that line and move it to a recent high in an up trend or a recent low in a down trend . This produces a channel. The idea is that as price approaches the upper channel line in an up trend we would expect to find sellers there and this would reverse the trend or at least pause the trend for a time. It will amaze you how often price will stop at T5 . At the very least you have an estimate of where price may retrace too.
Channel Trading is one of the best low risk high profit Forex trading strategy used by most experts. The idea is that as price approaches the upper channel line in an up trend we would expect to find sellers there and this would either reverse the trend or at least pause the trend for a time. In a down trend, as price approaches the lower channel line you would expect to find buyers and for the trend to stop or temporarily pause for a time.