Day trading using channel chart patterns

Day trading using channel chart patterns


hello traders at samurai trader here
welcome to this training session in today’s session we’re going to be
talking about and I’ll be showing you a number of illustrations on live charts
on trading using channels channels in my opinion form one of the top three
trading patterns that we see appear in basically every market every timeframe
so we’re going to be discussing some ideas on the how to draw channels
correctly and some ideas of how you may trade them and how they can also improve
your bottom line as always my videos are all real and
unedited so you’re left to excuse me if we’ve got any bloopers along the way but
I know you’ll forgive me for that so one thing I’d like you to be very cautious
of is this the information I’m about to cover with you may be very basic but
it’s very important so as I cover the information please don’t discount it
also I recommend that you have a notepad and pen handy because I can promise you
if you incorporate some of the ideas I show you today it will improve your
bottom line before we get into the PowerPoint and then go to the live
slides sorry the live chat so should say if you haven’t already requested the
truth about day trading one of my ebooks you can click on the download link under
the video and I have one other you can also request my free training manual you
can also request that in the link under the video and and of course you can go
and visit my website at Iamadaytrader.com but let’s get straight into that
before though I do need to put up the rest disclaimer there is a risk in
trading if you’re new to my channel now or if you haven’t read what sorry watch
one of my videos before please take the time to pause video and read the
disclaimer so let’s get into it now first of all the concept may seem very
basic so it’s very easy to think this is a waste of time when you look at some of
the things I’m about to show you so I want you to reframe it now the ones or
the trade is the most guilty of this are the experienced traders over seventy
percent of a traders I work with orbit of members of the day traders fast track
program already had one to ten years experience
and what I tend to find they can be a little jaded and a little closed-minded
so instead I want you to reframe it as you watch this video to get the most out
of it instead I want you to be asking yourself how can I use this to improve
my trading if you can pick up just one major idea that may turn your trading
around so it’s very important next channel trading is a powerful yet often
overlooked form of trading it capitalizes on the tendencies of markets
to trend they combine several forms of analysis to provide traders with precise
points for winter to buy and sell place your stop loss and take profit and when
we go to the charts we’re going to be looking at some CL charts we’ll discuss
those in detail and remember what I cover with you today here is applicable
door market it doesn’t matter whether you trade stocks forex or futures it’s
just as applicable now channels are useful for short to
medium to trading and in my opinion most suited the best it might be not really
best suited to day and short-term swing trading now there are three types of
channels you have bull channels that is when of course the market is trending
bear channels when the market is falling and horizontal or trading range
channels so we have three that we’ll look at on the charts in a moment now
some key points first of all start with one pattern and master it now what I
mean by that is I have a number of videos on YouTube discussing different
types of trading patterns for an example I love double bottoms and double tops
I love ascending and descending triangles I like wedges there’s a whole
lot of different patterns out there so what I recommend is rather than try to
take on ten different patterns and incorporate them straightaway
become very very good at one mask that before you move on to the next one now I
mentioned early that trading channels works in all markets and timeframes but
for low of the timeframe the more noise which means you’ll have a greater number
of false signals so as you about to see in a few minutes you’ll see
that I like to apply the channels on what I call my anchor chart I have my
trading chart my AC my entry chart and my AC which is my anchor chart so I’m
always looking if I’m trading with the trend that is in trading in the
direction of the trend on my anchor chart the higher time frame which for
most time frames or most types of charts that I trade is 3 times higher so I’m
always applying it to my anchor chart now with channels you’re looking at
buying the lows and selling the highs which you’ll get the concept when I show
you this now when you get a channel overshoot that is when promise action
shoots out of a channel for usually three to seven candles or more than
reverses then you may have a good possible counter trend trade and I just
wanted to put that there in case I forget to mention that because counter trend trading make sure I’ll leave a target to the chart because there’s a
couple of examples I want to show you now channels can tune into a wedge or
triangle or an ascending or descending triangle equals a major move and I’m
going to show you a couple of examples of that there are certain markets that I
think are absolutely fantastic with channels for an example CL particularly
in the morning session I tend to find that channels become less reliable in
the afternoon session and it’s look seriously it just amazes me every day
how accurate channels are you’ll get usually at least four or five really
good bounces or for-hire of a low of a couple of channels in a morning session
and we’re just very very reliable now another thing that’s really good on
channels and in my opinion the best channel so we’ve got around a 45 degree
now you don’t have to have that of course you can have narrower channels
but just keep that in mind if the better the angle of a channel the better the
opportunities are now let me just point one thing out here if you’ve got price X
and soaring up like this you might end up with what I call a snapback trade so
you’re probably not to have an opportunity or a channel
won’t form because it’ll shoot up then snap back so anyway I’m going to show
you some live examples in a moment let’s just have a look at a couple of older
charts they had they’re in my training materials so what we can see here is a
horizontal or a trading range channel now these are the channels are
personally I don’t like to trade I find them too difficult okay I’m at what I
call a momentum trader I like to be trading with the trend and so you’ll see
this quite often that you’re trading within a trading range however what we
do know is that when we’re in a range like this generally the energy is
building for a breakout in one direction or another now have a trick of course in
this particular case is making sure that you get that that you don’t get caught
in what we call a false breakout now what you can see here we had a breakout
a pullback and entering on the trend continuation can be one of your most
reliable ways of entering the breakout of a horizontal channel but the real
ones I wanted to focus on today are your bear and bull channels and when we look
at the charts you’ll understand them and I’ll show you how I draw them and you
know these are just as I mentioned very very reliable if you’re a Forex trader I
love them for an example with tick charts or range charts and I personally
believe they’re best suited bull and bear channels for day traders they just
worked really well and so what we’ve got here is of course a bull channel you can
see the market rising and I’m going to show you how I draw them as well in just
a moment now a lot of these eventually will you’ll get a breakout and of course
the channel is broken or they can turn into a rising or a falling wedge or they
can form a descending or ascending triangle now either way just remember
this if you’re in a channel and all of a sudden you start to see price action
change what’s happening here is the energy is building the market is coiling
the market is ripe for a breakout so these can be very very powerful when you
start to see price getting smaller and smaller like this
contracting the energy is building it’s ready for a breakout so let’s look for
charts and I’ve just got to mention here we’ll come back to this slide at the end
please subscribe to my channel if you haven’t already please make sure you
subscribe to my channel so you can be kept up to date with all of these videos
now what we’re going to do is look at a few different charts so I’ll be stopping
a pause in the videos I jump from one thing to another because I just want to
show you some classic examples of over the last week’s trading of some channels
so if we look at the the chart on the left is what I call my EC my entry chart
now just for your own records this is a CL chart a 233 tick and it wouldn’t
matter what market this is you’ll see this it’s almost identical every market
with the channels the way they’re formed in a way we set them up so this is a 233
tick and my anchor chart is a 6-10 now what we can see here is and I’m gonna
expand in a moment but I wanted to show you this we can see on the right what
I’ve got a channel I can see what direction the overall trend is heading
now I can then place more emphasis and my more reliable trades are going to be
trading with the trend what I can see on the right hand side is what my channel
here is in a downtrend so I’m going to be looking for for short trades now when
it comes here and if we look at this here I’ve got what we call a t7 this is
a double top against the floor pivot when I’ve got a double top like this and
all of a sudden I look over here and I’ve got a bounce or four channel or a
possible bounce this just then dramatically increases the probability
of this trade actually working out and it might add another five to ten percent
towards the probability of this trade working
so let’s now expand this chart and let’s have a look at channels themselves so
what I’ve done ups and let me just get this back again okay so on this
particular day I’ve got a couple of examples now it doesn’t have to be
perfect and you’re going to get what I call over
shoots so you walk it overshoots now when you get a dramatic overshoot they
are usually right for a good counter trend trade but also channels can keep you out
of bad counter trend trades which I’ll show you in a moment
so this is how I draw them I’m looking for at least two touch points here so
I’ll simply do this I will just go never smile just take a minute to pull this up
for you and I’ll just done what I’m going to do is not make it exact so we
can you can see exactly what I do so here is a couple of touch points that
I’ve got there to there I will then draw a parallel line and let
me just and make sure that I’ve got this disabled yep okay so I’ll draw a
parallel line which I have just here and I will then drag that up to a point
normal air drag it up to here or usually about the top here okay so I’ve got a
couple of touch points I’ll then drag it and then some keeping it separate just
to make it simple then I will click on it and I’ll extend it right it’ll extend
this one right as well so that forms my channel now what I’ve done here is just
separated a little bit from the one actually did now then what you can see
is as much as highly at that point you can then see that price action come down
hit it again almost if the top channel again come
down and bounced again finally before it broke the channel to a short side then
I’m looking for a new channel set up now with this one I then take that point to
that point as it’s forming I then do draw a whoops let me just do this for
you I’ll then do draw a parallel line or then drag that down and I only need one
point at that stage which is that one so got that point to that point I’ll draw a
parallel as long as I hit it there and if you look what happened then you’ll
see that price sectioning come down and then hit that lower channel so let me
move along here and then it come up and bounce off a
channel again come down and hit the lower channel again now where this can
be useful is this that quite often for an example in the day traders fast track
strategies will have time and time again we’ll have trade entries on these points
what it does is when you know you’re hitting the high of a channel you know
you’ve got a short but possible short trade and the rules are you sell the
highs you buy the lows sell the highs by the lows sell the low sell lows sell the
highs so perhaps you get the overall concept here now what is really powerful
for me is at any time I can glance over on my anchor chart to the right and I
can see what direction the overall market is heading now as I mentioned as
the day goes on quite often you’ll find that your channels become less accurate
but you only need to pick three or four of these bounce points a day and you can
make a lot of money out of the markets particularly when you incorporate and
build in your own entry points such as the ones that we have let me show you
some more examples now this is an interesting one from last week and that
is we had FOMC sorry yeah we had inventory report on Wednesdays mornings
at 10:30 so we can see I draw a yeah channel we actually had a wedge
formation here we had a breakout we exit the market we’re out of a market at
least 15 minutes before we have the inventory report the market goes crazy
now what I then did was was to draw further parallel channels that is
parallel lines off these lines and I dragged them down so I had two points so
at this point in this point I did another parallel drag the downs here now
we only had don’t leap so it there bounced up there I had that point market
then come down and bounced again and up at went now what was interesting here is
that these points here really straight off the parallel lines that I head up
above let me show you another example here’s another example we had to this
point to this point this is all I need I draw a small trend line from there to
there then I automatically extended right okay all I need is two points and
I then do a parallel line from there to there which drags down and it touched
there so all of a sudden that is I drag down so I’ve got one two three points so
ABC it comes down hits my lower channel there’s trade one you buy comes up
you’re looking for a sell at your upper channel okay and there’s your second
trade now what I want you to do is to start to draw these in and you’ll start
to see the patterns it’s very hard in a short training video to show you really
the pair of these but where it’s great for me as a trader is that I’ve only got
about 1/3 of a screen showing and when I’ve got my entry chart over here I can
simply glance over here and automatically see it just gives me a
clear direction to be looking for short trades and then with my trade entries
for an example just say we call that a 34b this is an 89 34b so when you
combine your trade entries they’re all high probability trade entries with
channels all sudden that dramatically increases a probability of that trade
working out now this is what we can see here is Monday the 3rd of July ok so it
was a very low it was a low volume day because we had 4th of July the next day
and actually it’s 4th of July today but I’m recording and so you can see here I
drew this channel in better there extended right there now I had this
point here so I knew where to drag my parallel once again just to show you how
I do it just again so simply as long as I’ve got
two points I’ve got two points there – there I will then do a parallel let me
just get back to the pointer I will drag that parallel down to my first swing low
which is there that’s all I need is one and I then extend it rise I then extend
that rise there is my channel so I had that one there so come up and it was
already starting to come down then it come down almost touched at the
bottom and this is what we call 200B it come up by then had a 34b then came down
and I had what we call an extension okay so extended market and this is what
I call a t3 and so then we had a great t3 to belong site if then come up but
bounced and then it reversed and just beware that usually the longer you’re in
the channel you know that the greater the probability is you’re going to get a
turn but this is something I want to show you which is very very important so
my next channel here was here so we went up okay at this point went up to the
second point come down here is the point for my channel and you can actually just
see under there there do they have the original they see if I can drag that
there you can see that that’s my original point there okay so then I just
took that the extended to the right okay now this is where divergence traders or
this is where you can be very cautious here on taking divergence trades now of
course what normally happens within a channel we bounced so high buy the low sell
the high buy the low sell the high buy the low but what happens here is of course we’re
in a virtually running parallel with our 34 when you see price action running
parallel with your major EMA’s that is a real warning sign this is where
divergence traders get really slaughtered and what you can see down
here on my mat on my platinum MACD here I had multiple potential divergence
trades and entries now what you really want to look for is if you’re really
interested in divergence straight you want to look for what I call overshoot
for price action to come out when you start to see that happening when you’ve
got what we call angulation price shooting out of a channel it’s called an
overshoot that will dramatically improve the opportunity or the percentages of a
counter trend trade at working now this is something else that then will form
you can see finally we come up and we broke come down here and then finally
hit the lower channel and this of course is a
bull channel we then had a buying opportunity
it slowly crept up and then what happened it actually formed into what we
call an ascending triangle you can see what I call that a flat top price action
just went along there finally we broke below the channel now technically
speaking they say that when you have a ascending triangle price action is meant
to go up and this but that always true and in this particular case we had a
good break and then it coming out turning to an 89B so you can see here
that quite often I’ll turn into triangles or into wedges now the bottom
line here straight it says of gifts giving you a very very quick overview
here on on channels now I could spend hours preparing powerpoints for this and
whatever this is hey this is free but I’m giving you in its and there’s a ton
of stuff on the internet about this and there’s some great books and that’s one
thing too sorry members I forgot to bring this up if you’re a member of the
day traders fast track program members don’t forget in the trading ebooks
section I’ve got three or four great books in there on trading channels so
sorry I’m Chuck I’m chart patterns let me get this right
so in the members library under trading ebooks there are some great books there
on trading patterns so please make sure you go and visit those so traders
hopefully you can just um I just very briefly then just see a slim glimpse of
what channels can do but if you’re trading with the trend and you’re
bouncing from the hide of a low etc it just adds an extra five to ten percent
of probability of that trade working for you
so as we finish and wrap this one up you feel not already a member of a day
traders fast-track program please visit my website that Iamadaytrader.com we
can request my free ebooks and for one hundred and ninety seven dollars traders
you get the most comprehensive and peps um and just very quickly here there are
over 300 videos now my package you’re over 300 training
videos some some of them are Q&A etc but over the years I’ve got Dom trading all
sorts of patents I’ve got comprehensive powerpoints on over really well I call
over 12 world’s best day trading strategies
I’ve got cheat sheets there’s a ton of indicators that all included for one
hundred and ninety seven dollars it’s all included if you’re a new member
under downloads there are dozens of charts there are apps is all sorts of
things here is timeframes that I like to track bears charts is a ton of stuff
here this is the world’s most comprehensive program with no upsell the
only upsell is if you choose to join for $497 a month you can join my chatroom
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should you choose however everything is in my program so visit my website get
more information on that but most important subscribe to my channel so you
can be kept up to date with more videos and as I mentioned traders and taking if
you pick up just one idea and this is very very important as traders whenever
we read something on trading we read a book we peruse something to be seen
ourselves what can I learn from this how can I use this to improve what I’m
already doing and one more thing I’ve got to say if you’re already an
experienced trader you don’t throw out what I teach even though I’m teaching
you what are some of the world’s best day trading and swing trading strategies
what you do you take the strategies and say how can I use these to improve what
I’m already doing very very important the questions that we ask ourselves and
the statements we say to ourselves Thank You traders I hope you picked up about
one or two ideas from this session and I’ll see you hopefully or you’ll hear
from me from our next video thank you

3 Comments

  • LinkWave

    July 4, 2017

    Finally a follow-up video. Great video, thank you.

    Reply
  • Nandini Mukerjee

    August 24, 2017

    Thanks for the idea.

    Reply
  • I Am A Day Trader

    October 20, 2018

    "Get the Competitive Edge Now!
    https://www.iamadaytrader.com/2018-check-out-the-day-traders-fast-track-program"

    Reply

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