Trend channels are a popular way to predict prices and help traders identify potential support or resistance zones. However, an Automatic Channel indicator can solve the problem.
What’s the Automatic Channel indicator?
Trend channels show the strength and duration of a trend. Traders draw the channel using either the trendlines or the equidistant feature on a trading platform. However, there is another type of channel that draws five parallel lines directly onto your chart.
The Automatic Channel indicator shows a wide channel with an interior channel. A mid-line intersects the boundaries of the broad channel at the center.
These parallel lines can act as support or resistance zones, depending on the relative price position. A trend is considered mature and near to reversal if it reaches the channel boundary.
To help you locate potential support or resistance zones, the Automatic Channel indicator draws five parallel lines across your chart. These lines can be used to enter and exit your positions. The indicator is very useful, but it should not be blindly used. To increase your win rate, you should use it with other trend tools.