Channel, what are you? - page 5
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Draw a channel by hand and tell the EA to work in the drawn channel. There are a lot of similar solutions in the codebase.
This is a semi-automatic option. Not our method. Especially since building a channel is not a problem:
The question is how to determine when there is a channel and when there isn't:
The question is how to determine when there is a channel and when there isn't:
There is and always will be a channel.
Draw a trend line, the second line is always parallel to it at the distance of the largest extremum.
In your variants the channels are not drawn correctly.
There is and always will be a channel.
Draw a trend line, the second line is always parallel to it at the distance of the largest extremum.
I've already thought about that. You may be right. But then there must always be a trend. Now, that is questionable. There are many areas of uncertainty where even the brain can't see the trend.
charter:
In your variants the channels are drawn incorrectly.
In both variants??? The end of the lettuce line (on the right) means a reference point. Anything to the right is uncertainty when we are at the reference point. Everything to the left (including the line itself) is history.
In the first variant the channel is correct IMHO.
In the second one, we are dealing with a transitional moment, when one trend changes into another. This is the point I wanted to show, so that we could see that a wrong channel is drawn at the trend junction. That is why it would be interesting to cut out such cases, identifying when there is a channel and when there isn't.
From the last hypothesis the conclusion follows - there is no channel at the junction of trends. How to detect such positions? - We can distinguish the trend reversal patterns. So far I have not come up with anything more accurate.
I've already thought about it. You may be right. But then there must always be a trend. Now, that is questionable. There are many areas of uncertainty where even my brain can't see the trend.
In both variants??? The end of the lettuce line (on the right) means a reference point. Anything to the right is uncertainty when we are at the reference point. Everything to the left (including the line itself) is history.
In the first version, the channel is correct IMHO.
In the second, we are dealing with a transitional moment, when one trend changes into another. That is the point I wanted to show, to show that at the junction of trends we obtain a wrong channel. Therefore, it would be interesting to detect such cases and define when there is a channel and when there is not.
The latter hypothesis suggests that there is no channel at the junction of trends. How can we detect such positions? - We can identify the trend reversal patterns. So far, I have not invented anything more accurate.
Sort out the "trend line" issue - everything will immediately fall into place.
OK.
Definition:
Trend lines trendlines are lines of support (for an uptrend) and resistance (for a downtrend).
A trend line is a straight line connecting at least two price peaks (or troughs) on a chart for a currency (asset). It should also be noted that within the development of the main trend line, a lot of secondary trends can be formed by additional trend lines.
In this context I agree with you - there is always a trend line. From the definition, you can see that a trend line can be drawn from the tops of a zigzag. The larger the scale of the zigzag, the more significant the trendline.
However, all this does not answer the question - what to do with a channel at the junction of trends. Namely, when one trend line breaks the existing trend strongly and then reverses it in the opposite direction (at the moment of breakout we do not know it yet). We can assume that until the trend is fully reversed, the channel direction should not change. That is, in the second figure, the channel should be pointing downwards, and there should be an upwards break in the channel visible. Am I correct?
If so, you may formulate the channel condition:
A channel is defined if the segments connecting the last 2 highs and the last 2 lows form an angle < X (condition of co-direction of the segments - when X=0, the segments are parallel).
X can be taken into EA parameters.
Can this criterion be used as a condition to enable/disable channel trading? It does not make sense when the channel is broken, the price moved sideways and is not going to come back - that is what happens when the trend is crossing and the market is highly volatile.
There is and always will be a channel.
Draw a trend line, the second line is always parallel to it at the distance of the largest extremum.
In your variants the channels are drawn incorrectly.
This is a controversial statement. What do you mean there is always a channel? I would say that when there is a trend in the market, an informative channel can be drawn. No trend, no channel.
There can be two trends in the market. One is trend and the other is flat. In between these trends there might be periods of uncertainty and in this case it would be useless to build channels.
In a flat, only a horizontal channel can be drawn. In a trend, it may be a sloping one.
However, it is interesting that on a certain time scale horizontal channels can be used in any market phase. Even in a trend, and it is horizontal channels are able to detect an incipient trend much earlier than is possible with sloping channels.
Here's a look at the picture. Classically the franc is trading at the moment.
The horizontal channels are programmatically built and the sloping channel is manually built. The horizontal channel clearly rules...
A controversial statement. What do you mean, there is always a channel? I would say that when there is a trend in the market, then an informative channel can be built. If there is no trend, there is no channel.
There can be two trends in the market. One is trend and the other is flat. In between these trends there might be periods of uncertainty and in this case it would be useless to build channels.
In a flat, only a horizontal channel can be drawn. In a trend, it may be a sloping one.
However, it is interesting that on a certain time scale horizontal channels can be used in any market phase. Even in a trend, and it is horizontal channels are able to detect an incipient trend much earlier than is possible with the inclined channels.
Here's a look at the picture. Classically the franc is trading at the moment.
The horizontal channels are programmatically built and the sloping channel is manually built. The horizontal channel clearly rules...
A trend is a channel. If it is horizontal, it is called a "sideways trend".
This is true. But a trend is not always traded within a sloping channel.
That's where the horizontal channels come in handy. You can see in the screenshot...
A controversial statement. What do you mean, there is always a channel? I would say that when there is a trend in the market, then an informative channel can be built. If there is no trend, there is no channel.
Can you define the criteria for an "informative channel"? The presence of a trend is not very clear... Then what are the criteria for a trend?
A controversial statement. What do you mean, there is always a channel? I would say that when there is a trend in the market, then an informative channel can be built. If there is no trend, there is no channel.
There can be two trends in the market. One is trend and the other is flat. In between these trends there might be periods of uncertainty and in this case it would be useless to build channels.
In a flat, only a horizontal channel can be drawn. In a trend, it may be a sloping one.
However, it is interesting that on a certain time scale horizontal channels can be used in any market phase. Even in a trend, and it is horizontal channels are able to detect an incipient trend much earlier than is possible with the inclined channels.
Here's a look at the picture. Classically the franc is trading at the moment.
The horizontal channels are programmatically built and the sloping channel is manually built. The horizontal channel clearly rules...
What is a Flat?
It is a sideways price movement along a resistance line. This is where the bulls and the bears are "fighting", where the forces are consolidating and this is the level of a "fair" price.
Most often the resistance line breakout is at the trend line, because that is where a lot of pending support forces gather. But it doesn't have to. A strong price breakout may occur before reaching the trend line.
Having broken through the resistance line, the price will move towards the next resistance line.
This new extremum is most often located at the intersection of the second channel line (the line parallel to the trend line) and resistance level. This is where the pending resistance forces "hang out". Sometimes these forces can push the price back to the trend line, but often the price moves along the resistance line to the other end of the channel, to the trend line. It is this sideways movement of price along the resistance line that is called Flat (more correctly called Consolidation).
And the last one. Breaking through the trend line indicates the weakness of support forces, and hence the possibility of a change in the direction of the trend.