Hello,
I found this on babypips school:
There are three types of channels:
Ascending channel (higher highs and higher lows)
Descending channel (lower highers and lower lows)
Horizontal channel (ranging)
Could someone explain me what is meant by description in the brackets? It doesn’t make complete sense to me.
SwordOFManagement’s picture is a good start, but I would add for the third category (ranging) that this means simply that Price is neither in an uptrend nor a downtrend, but is moving sideways. There will obviously be moves up and down within this range (Price never simply flatlines!) but no decisive up- or downtrend. Think of two parallel lines on your chart with all the recent highs intersecting with the top line and the recent lows intersecting with the bottom line, that is a ranging market.
For the first two categories you mention, when I was learning to trade it was described to me as the market taking a breath. Price rarely moves decisively in one direction or the other without any form of retracement, but rather (for an uptrend) moves up a bit, pauses/falls back a little, then moves up again and repeats. These dips/pauses are the intakes of breath, and overall give the chart a pattern of a wavy line moving upwards (uptrend) or downwards (downtrend). These dips, within a sustained trend, will see Price making a series of higher/lower highs/lows.
Uptrend, downtrend and ranging market are all tradeable, but using slightly differing approaches.
ST
As a rule of thumb:
You should guesstimate angles in multiples of 5*
“Flat” is around 5 or 10 degrees
A pennant triangle is 10 to 15*
A channel is usually a long term trend with an angle between 15 & 35 degrees
A steep trend should be 50 to 70*
Once you find the angles that your chart is using you just scale fix the chart and the angles should remain accurate.
I like that observation, and since this thread is about trend lines, I’ll ask a related question. In physics the steeper the slope the faster the ascent or decent. So, in a wedge slope downward or upward, if one channel line is steeper that the other does that mean that, that side of the channel is the fastest. Example. A descending slope. If the top channel is lower the the bottom channel does that mean the highs are forming faster than the lows. Vice Versa in an up trending channel.
Forgive me, I am not quite sure what you are asking…
are you referring to something like this:
http://i43.tinypic.com/23hoarl.gif
I forgot to mark that the top of the triangle is 35* 
Why dont you forget about measuring a trend line in degree’s and actually draw a trend line that suits the actual price action being caused. In reality not many trendlines are fixed to a given degree, most of the stronger trend lines are drown from fractals formed abover/below the price depending on the trend that you are following.
Just seems allot more simple with this approach, and you are at the end of the day following price to the exact degree.
The very reason that I use angles in 5* increments is because “In reality not many trendlines are fixed to a given degree”.
Instead of 89 different possibilities I have 18 & of those 18 I only seriously consider 12 (15-70*)
And you know what, those 12 angles work just as good as using all 89.
I am basically talking about wedges in patterns. When a wedge is formed you have one line of the channel which is at more of an angle than the other. Which means the slope of the line is steeper than the other. Now according to the law of physics a steeper slope with an ascending or descending line ( doesn’t matter which way it is pointing) has a faster rate of speed. So my question is when you have to parallel lines with your candlesticks in the middle, highs and lows, the price most closely related to the line of descent or ascent, will it be faster or slower than the opposite line. If so how does this affect the highs and lows.
If the channel is sloping upward then price will be moving faster than the line drawn under it.
The median line is sort of equilibrium with price spiraling around it and varying rates of speed.
I am more concerned with the maximum time frame associated with the high or low extreme.
I know that price will move say 300 pips from one weekly extreme or the other as the range expands.
I know that the larger the time frame the larger the corrections are that return to new highs.
I know that the closing price is almost never the highest high or lowest low & the greater the TF the greater
the possible distance between the highest high and the close.
I try to catch a trade to statistical range expansion, sidestep a correction size related to that period, and possibly a ride to a weak close.
