Educatione Horizontal candle pattern

Trading strategies Horizontal channel patterns are one of the simplest and most effective forex trading strategies that can be used in all forex pairs and can also be used in commodity trading and indexes. This strategy can be applied in any time frame period.
Horizontal channels are areas where markets are trying to test how strong the support and resistance zones are. If on the chart you find a price that is trying to test resistance and form the Top 1 (see picture), then the price will go down trying to test support and form Bottom 1. Then the price will rally again trying to test the resistance formed in the Top 1 and will form the Top 2 Prices will go back and forth in this area if the market is testing how strong the support and resistance zone is. If you find the horizontal pattern of this channel in a market, then watch and prepare to open a position if the price manages to break out in one of the support or resistance zones.

How do you see the horizontal pattern of the channel?

We make simple analysis possible.
1. When the previous market has a strong trend condition, whether it's an uptrend or a downtrend, the market will then consolidate after the trend ends. When the market is experiencing consolidation, prices tend to move up and down in an area that does not have too high volatility. The market will only move in that area. If visually, the price will be seen entering the tunnel.
2. A valid horizontal line channel is formed if the Top 1 and Top 2 are parallel, as well as the Bottom 1 and Bottom 2. At least 2 lines must be formed above and 2 lines below.
3. After Bottom 2 is formed and the price bounces again, we already know that the price will form a tunnel.

How do you trade using this horizontal channel pattern?

1. When the price has formed a bottom 2 and the price is seen starting to rise, pending pairs limit sell orders in the Top 2 area (resistance)
2. When the price has formed the Top 3, but there is no reversal, wait until a reversal candlestick pattern is seen and you can enter there. To learn the types of bearish candlestick patterns, you can read the full written candlestick patterns.
3. You can also open a buy order if the price approaches the support area and forms a bottom 3. Wait until there is a bullish candle reversal pattern.
4. Place a stop loss approximately 5-10 pips outside the support / resistance line.
5. Place take profit only in the area of support and resistance.
6. When the price has managed to breakout in one area of resistance or support, the weight of the horizontal area of the channel has ended. This means that the market will end consolidation and will start a new trend.