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Tanapi Daily Channels

A System of Daily Channels

  • Timeframe: M15
  • Trading Style: Swing trading, intraday trading.

Indicator Operation Principle

The indicator calculation is based on the regularities of price movement in channels. Trading using parallel channels for a long time, the author discovered that for each time interval (a year, a month, a week, a day), there are static upward and downward channels, using which one can predict the future movement before the price actually draws this channel.

The author uses the yearly, monthly, weekly and daily channels for analysis. This indicator draws weekly channels and is the main one for analyzing short-term trend and finding entry points.

The indicator does not use price averaging or its past behavior for calculations. All levels and channels are calculated at the time of the week opening and remain constant, which eliminates indicator redrawing and makes it a unique tool for the analysis.

The system allows you to objectively and unambiguously identify the current market phase and direction, volatility, potential pivot points, duration and intensity of the current cycle.

The indicator structure (screenshot 1)

  • a. Horizontal levels with price labels — important support (green) and resistance (red) levels.
  • b. Horizontal zones around the levels (gray and blue) — conditional touch areas.
  • c. Diagonal thick lines — the borders of the upward (green) and downward (red) high volatility channel.
  • d. Diagonal zones — the borders of the upward (green) and downward (red) low volatility channel.

How to Use the Indicator

The main and most important regularity reflected in the indicator is the following:

  • In the Up trend, the price moves in an upward price channel of the current week and stays in the ongoing week's upward channel every week thereafter.
  • In the Down trend, the price moves in an downward price channel of the current week and stays in the ongoing week's downward channel every week thereafter.

But do not forget that the market is in the flat for 70% of time, and only 30% it is trending. Therefore, change of a price from the upward to the downward channel (or vice versa) does not mean that the trend has reversed. This signals the end of the current trend and transition to a flat, then a reversal or continuation is possible.

An example for the downward trend (screenshot 2)

In a downtrend, the price stays in the downward channel (a) every week and hits the lower boundary of the upward channel (b). The end of the downtrend is the moment when the downward channel is broken through at the point (c). The marked consolidation area is within two downward channels and is not a reversal.

Questions: tanapi@mail.ru, Skype "tanapi12"

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