86# Directional Channel Trading
Dynamic Support and Resistance trading
Regression Channel as direction and dynamic SR
Submit by Lorenz
Directional Channel Trading is a trading system based on linear regression intended both as a forecast of the market trend and as a dynamic support and resistance. Of this type of system there are many variations also published on this site, but the peculiarity of this is to enter the market when a trend begins to emerge.
The peculiarity of this trading system is to insert more trend arrows as confirmed.Then the system can be used both in tendza defined by the regression channel and on the retracement of the trend.
This trading strategy is suitable for both day trading and swing trading.
Time frame 30 min or higher.
Currecy pairs: Major, Minor, Commodities and Indices.
Metatrader 4 Indicators:
Automated trend line V.2,
Big Arrow,
C Bird,
Entry arrow,
Little arrow V.2
Yellow arrow
Launcher directional Indicator
MACD TRUE Color
Trend Filter
Symbol Changer
Trading rules Directional Channel Trading
You can only trade in the direction of the regression channel or even on the retracement in the opposite direction to that of the regression channel. I recommend at the beginning to trade only in the direction of the regression channel.
Buy
The price bounces off the lower channel lines.
MACD crosses upward.
Trend filter is green.
The arrow indicators show an upward trend.
When to enter? You can enter the first, second or third arrows. Entering the third arrow, however, means entering an ongoing trend.
Sell
The price bounces off the upper channel lines.
MACD crosses downward.
Trend filter is red.
The arrow indicators show an downward trend.
Exit position
Place initial stop loss above below the channel. Profit target ratio stop loss minimum 1:1.4.
This strategy, if done well, is very profitable. Winning strategy.
Very simple exercise to start applying this model:
identify 5 graphs with a slope higher than 45. Locate 5 graphs with a slope less than 45 degrees.
In the pictures Directional Channel Trading
Share you opinion.
