Combining channels and social trading

Channels in foreign exchange trading are a part of technical analysis, which is a complex but rewarding tool. This article is going to explain the basic theoretical foundations behind channels. Before you start plotting trends on Metatrader, you should be introduced to the theory. The easiest way to identify the trends is using the lines, which are drawn on the peaks or bottoms of the exchange rate graph. Upper band is drawn on the peaks and lower band is drawn on the bottoms. When drawing the lines, it is essential for the lines to touch as many peaks and bottoms as possible. Try to search for a correlative, which is symmetrical to the previously drawn line. Upper and lower band together create a bearish or bullish or horizontal channels. You should look for horizontal trends, where the maximums and minimums are on the same level. The upper and lower band, if they are not parallel, will cross at some point in time and thus create a specific triangle. In the future, one of the lines will be broken, resulting in a sudden market reaction. Platforms like Meta trader 4 usually have built-in tools for plotting the trends, which enables creating parallel lines or copying existing trends and changing their position on the graph. Try to experiment with the intrinsic tools of Metatrader. You will be surprised to learn that the future exchange rates movements often stick to the plotted channels. If you do not feel experienced enough to create your own channels, then try downloading one. Thanks to social trading you can get schemes from top traders in forex, mt4 platform is also open to any modifications. Another added value of social trading is the possibility to improve your own plotting methods by comparing the schemes with historical data.