Channels

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 Parallel Channels / Rectangles

— There should be at least 4 touches, 2 on the

2 1
bottom 2 on top. Technically the pattern should be
viewed as neutral as price can break up or down, but
trading the break in the overall trend direction yields
better results.

— Looks for an increase in volume upon the

breakout.

Channel height
1) For price targets take a measured move of the
parallel channel and add the distance to the breakout
direction.

2) In this example we are shorting the top of the

channel with a partial rise and a TP1 at the bottom
of the channel. If price breaks to the downside we
move SL to mid point of the channel and TP2 is the
measured move. For a maximum price target for a
TP1
TP3 measure the length of the parallel channel and
extend it vertically above the channel in the direction
of the breakout.

Channel height
Explained in Contenders Parallel channels
pt. 1 stream on 4. 9. 2019 (13:00)

TP2

Chart Champions
Cheat Sheets 2
 Day Trading Channels

I will generally trade a channel from bottom to top, or top to bottom with a take profit set at the mid
point of the channel. I like to take 50% profit at the mid point and move stops up to breakeven. I will
compound the trade if there is a close above the midpoint.

Explained in Contenders Parallel channels

Chart Champions pt. 1 stream on 4. 9. 2019 (19:51)
Cheat Sheets 3
 Early signs a range
could form

Daily Level

Daily Level

You can get early signs a range may form. If you have a move from a major support to a major resistance,
and the price starts to close back under the resistance line then it appears the resistance is holding, and you
could short back down to the bottom of the range support, which in turn will start to create a channel.

Explained in Contenders Parallel channels pt. 2 stream on

Chart Champions 11. 9. 2019 (21:09)
Cheat Sheets 4
 Price Formed a Well
Defined Channel
Deviations from the range. Price gets outside of the
range, but instead of getting follow through, gets a
series of Lower highs and Lower Lows to get back in-
side of the range. Once back inside the range after a
deviation one would enter a trade to the the side o f
the channel, taking profit in the middle.

Daily Level

Daily Level

Another deviation from t he r ange, but quickly gets

back inside offering a long trade setup.

Nothing in trading is perfect but after all, range was formed after an early sign. There are some deviations
which is completely normal.

Explained in Contenders Parallel channels pt. 2 stream on

Chart Champions 11. 9. 2019 (27:25)
Cheat Sheets 5
 Parallel Channels

To start a parallel channel you need to connect 3 anchor points. Click on point 1 to 3 and drag
to point 2. This will create the channel. In an upwards trending channel like this you would use
the middle and top of the channel as price targets for a long.

Explained in Contenders Parallel channels pt. 1

Chart Champions stream on 4. 9. 2019 (31:48)
Cheat Sheets 6
 Parallel Channels

Price hits top of the channel and target was hit for the trade.
As this is an upwards sloping channel, one may not want to take a short from
2
the top, but rather enter a long from the retracement.

Price hits mid point of the

channel and retraces

It played out. On the upwards sloping channel, one may rather take longs at the
bottom of the channel than shorts at the top.

Explained in Contenders Parallel channels pt. 1

Chart Champions stream on 4. 9. 2019 (33:52)
Cheat Sheets 7
 Upwards Sloping Channel Within a
Higher Timeframe Sideways Channel

3. Price finding resistance off the mid point of

the upwards sloping channel.

2. Price starts to move upwards as expected, and in turn creates a new

upwards channel within the sideways channel.

1. When price hit the bottom of the

channel we would long to the top.

As price ranges from low to high in a (HTF) channel it is naturally expected there is an
upwards sloping channel being formed on the way up and a downwards sloping channel
formed on the way down.

Explained in Contenders Parallel channels pt. 2

Chart Champions stream on 11. 9. 2019 (16:03)

Cheat Sheets 8
 Parallel Channel Example

Close back inside the range = short - The

move outside was just a deviation from the
range (fake out)
Resistance
= short

Resistance
= short

Price closed outside of the channel range

= channel support has now flipped to
resistance

Support
= long

Support
= long

Support
= long

An example of not the most obvious yet respected channel and how one would/could trade it.

Explained in Contenders Parallel channels pt. 1

Chart Champions stream on 4. 9. 2019 (38:22)
Cheat Sheets 9
 Parallel Channel Example

Price gets a candle close outside of the

range, and then back tests the channel range
resistance as support for
Short top of the range. As this is a smaller range another impulse wave upwards, a
I would trade side to side eg. Short top of the perfectly traded channel.
range, take profits at the mid point of the range,
but ultimately hold the short till bottom of the
range.

Sideways r:ange is formed after

a rise in price, thus one could
favor trading longs in the range
(Though I would trade botn
ways). Long bottom of the range, taking profit in the middle of the
range, but trading it back to the top.

Previous smaller time frame

channel acts as support as price
dips back into it.

Never ever delete a channel from your chart when broken because the old channel will be
broken and come back as a new channel. The old channel acts as a support.

Explained in Contenders Parallel channels pt.

2 stream on 11. 9. 2019 (40:18)

Chart Champions BTCUSD 15/08/2019

Cheat Sheets 10
 Parallel Channels

Sideways channel con-

solidation prior to a big
move up.

Price has moved away from the channel resistan- Price again finds support
ce, but when price retraces it can find support on the mid point of the old
from the old channel parallel channel

Amazing example how old channel acts as support when revisited (multiple times).
That’s why we do not delete respected channels.

Explained in Contenders Parallel channels pt. 2

stream on 11. 9. 2019 (46:10)

Chart Champions BTCUSD 15/06/2019

Cheat Sheets 11
 Parallel Channels

Top of the channel is mar-

ked by the highest candle
close

Partial rise is confirmed

when price closes back
below mid of the range

As price closed above the

mid point a long trade After the partial rise a short can be taken
would be taken to the with a close below the mid poind and aim for
high of the range channel range low support

Old resistance flips into

support to create the
bottom of the channel

When trading a big daily range like pictu- Trade would be taken again from the bot-
red one would trade from bottom of the tom of the range support to mid point
channel to the mid point

Daniel likes to draw his channels from the respected bottom candle closes to the respected
top candle closes but if there is an important factor such as S/R flip, he goes for a wick as well.
There is no hard rules, see what is respected more.

Explained in Contenders Parallel channels pt. 2

stream on 11. 9. 2019 (33:29)

Chart Champions BTCUSD 05/2019 to 10/2019

Cheat Sheets 12
 Fibonacci Channels

0.236

0.382

0.5

0.618
0.66

0.786

Fibonacci channels are best used on higher time frame channels. The Fibonacci numbers
are then used as support and resistance lines. Always you must have confluence to enter a
trade. The standard Fibonacci channel is very similar to standard parallel channel, the only
difference is that Fibonacci channel is exclusively used on HTF. Start on the high and connect
series of the highs (second click) and the third click is on the low. Fibs have to be respected
and if they are respected you use it over classic channel.

Explained in Contenders Parallel channels pt. 2

stream on 11. 9. 2019 (33:29)

Chart Champions BTCUSD 05/2019 to 10/2019

Cheat Sheets 13
 Long Term Channels

We can see the 1 .75 .5 .25 and .0 points of the

channel are well respected as support/resistance.

When closing outside of the Channel

it is giving signs the downtrend is over
(or at least temporarily)

Long term channels are extremely useful for determining when a long term down or up trend
is over and the coin is ready to reverse. It has to be used on at least 1 day TF and it has to be
respected. If you look on 1+ year data and it is extremely volatile log scale is extremely helpful
because you can see all the movement. You can adjust the channel if break is not convincing.

Explained in Contenders Parallel channels pt. 4

stream on 25. 9. 2019 (37:46)

Chart Champions IOTUSD 11/2018 to 7/2019

Cheat Sheets 14
 Fib Channel Extension

01 0.618 1.618 22 .618

— Best used on HTF. Connect the high (peak), to low

(valley), to secondary high (peak). On the second
peak, there should not be any other touch. Fibs are
areas of S/R and if 0, 0.618 and 1 have no respect it
is not a valid channel.

3
— Take a trendline from c the major peak to major
valley (point 1 to point 2) in a downtrend, and then
your 3rd click will be on a significant peak (point 3).

The width from the 1-2 trendline to point 3 is the Fib

channel, from this we can calculate price targets
for where a bounce can come to. Always use a Fib
channel with confluence with another indicator! To
know that you have a valid Fib channel you want to
see the 0. 618 or 1 trendlines have been respected in
the past, if they haven’t the Fib channel is not valid.

XBTUSD 9/2019

Explained in Contenders Parallel channels pt. 1

stream on 4. 9. 2019 (13:00)

Chart Champions
Cheat Sheets 15
 Fib Channel Extension

Exact touch which gave

10% bounce

0 0.618 1 1.618 22 .618

A really nice example of nicely respected Fib channel extension.

Explained in Contenders Parallel channels pt. 4

stream on 25. 9. 2019 (27:41)

Chart Champions XBTUSD 1/2019 - 10/2019

Cheat Sheets 16