Ascending and Descending Channels

In this blog Global Market Astro briefs about Ascending and Descending channels, frequently used term in technical analysis.

ASCENDING CHANNEL

An ascending channel is defined as a price action confined between upward sloping parallel lines. Higher pivot highs and higher pivot lows are technical indicators of an uptrend market. Trend lines frame out the price channel by drawing the lower line on pivot lows, and the upper line is the channel line drawn on pivot highs. Price is not always perfectly contained but the channel lines show areas of support and resistance for price targets. A higher high above an ascending channel can signal continuation. A lower low below the low of an ascending channel can signal trend change.

Price channels show trend. A trader can trend trade in a channel or swing trade from support to resistance and back to support. In an uptrend, start with the lower trend line drawn on pivot lows and add a parallel channel line to complete the formation.

DESCENDING CHANNEL

A descending channel or downtrend is the price action contained between two downward sloping parallel lines. Lower pivot highs and lower pivot lows are a bearish signal. In a downtrend, a trade might be entered at the trend line and exited at the channel line. A lower low below a descending channel can signal continuation. A higher high above the low of an ascending channel can signal trend change.

Price channels show trend direction. The slope of the channel shows momentum. Here is a simple technical edge: start the down trend line using two lower pivot highs and stay short below the trend line.                                                                                                                          

Source: https://www.globalmarketastro.com/