Channels are price ranges that a stock or other investment trades within over a period of time.
The chart above illustrates the key aspect of channels. They can reveal potentially important price levels, from a chart analysis perspective.
Chart users attribute these signals to the psychology of individual investors attaching significance to price points that are perceived as important.
Some active investors use channels more extensively.
This trading approach has unique risks.
Risk management by placing stop/stop-limit orders at prices above and below the buy and sell prices, to help protect yourself against losses.
The chart above illustrates the key aspect of channels. They can reveal potentially important price levels, from a chart analysis perspective.
Chart users attribute these signals to the psychology of individual investors attaching significance to price points that are perceived as important.
Some active investors use channels more extensively.
This trading approach has unique risks.
Risk management by placing stop/stop-limit orders at prices above and below the buy and sell prices, to help protect yourself against losses.