Alternatively, choose execution points based on the time frame persistence of the channels. The longer the formations exist, the more likely they will provide support or resistance for your trade. Always try to locate other key price levels to cross-verify PPC extremes. When moving averages, Bollinger Bands or Fibonacci retracements cross parallels, risk decreases and potential reward increases. TEAM price action from 1990 to 1996 finally confirmed the existence of a parallel channel.
Channels often take years to develop and can persist even longer.
Due to the wide range of price movement over long periods of time, monthly and weekly PPCs are much easier to locate using geometric scale than arithmetic. As TEAM completed its multi-year PPC, it concurrently printed channels in several other time frames. Article contributed by The HARD Right Edge , which presents highly original tutorials, strategies and resources on multi-trend technical analysis and and short term trading. Article reprinted here with permission , which presents highly original tutorials, strategies and resources on multi-trend technical analysis and and short term trading. All Rights Reserved.