AtoZ Markets – In forex trading, there is a form of technical analysis called the trend line. Trend lines are ubiquitous but underutilized because they can be challenging to draw. But if we draw them correctly, then they can offer a hundred percent precision.

Taking the trend lines to the next level

Let us say that we drew another parallel line with the same angle as the downtrend or the uptrend. This action will create a channel. These channels are also known as price channels or trend channels. These are also tools in technical analysis that help a trader to spot great buy and sell opportunities.

The upper trend lines act as resistance, while the lower trend lines act as the support. It only means that the channel’s tops or bottoms have the potential to be areas of support and resistance. Trend channels may either have a negative or positive slope. We consider negative or downward slopes bearish, while the positive or upward slopes are bullish.

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