“Day Channel” indicator marks short term support resistance levels for intraday trading. It consists of the day’s High, Low, midpoint, and levels at 38.2% from the day high and low. Day channel is intended to use on lower time frame charts like 5 minutes, 15 minutes, etc. These levels become valid after a few hours of market open each day, best to use towards the closing session.
Trading activity below the midline shows bearish sentiment for the day and above midline implies bullish sentiment. In the image, price breaks below the lower support line and trades lower. Later it consolidates between the two lower lines. The day high and low are good support resistance levels. Day channel is not a stand-alone indicator, it should be used together with price action or other indicators to confirm breakout or reversal at these levels. Candle patterns forming at these levels can be used to open trades. When a reversal candle pattern like engulfing bars, hammer, etc. form at these levels, trades can be opened.
Day Channel.zip (2.1 KB)