The Discrete Channel (kind of renko on time) is a very useful indicator to filter the market noise.
It consists of two outer lines. Until the market price is between the boundaries of the channel nothing happens. If price move outside the channel, you can enter buy (if the up line is broken) or sell (if the bottom line is broken)
How to use
The indicator is very simple to use.
It accepts 4 inputs for adjusting the behaviour based on the user preference.
- Channel height: the distance in ticks between the up line and the down line.
- Advance step: when a new level is created, a shift is applied. The shift can be anticipated or postponed.
- Auto Advance: the indicator adjust itself the direction of the advance step or eventually does not apply it.
- Use Open /Close price: the line of the channel is broken depending of the candle values. It can wait the close of the candle or reacting based on the minimum and maximum of the candle.
When an up channel is created, it could be an opportunity for entering long.
When a down channel is created, it could be an opportunity for entering short.
The indicator can be very useful in hedging mode for deciding when entering in the market to cover positions.