Leading indicator. Marks in the future two price channels - if the price comes into the channel, then the quote changes with the speed specified in the parameters. In these areas, price reversals are most likely.Two price channels are displayed - one on top, showing the growth rate; the second one - below, shows the speed of the fall. Channels are displayed as a solid center line and two borders drawn with a dotted line.
In many cases, the area between the channels is not important for trading - you can paint it.
- PERIOD - the number of last considered bars
- PERCENT - growth / decline rate for PERIOD
- COLOR - the color for drawing the indicator. If not specified (clrNONE), the settings from the standard panel will be used.
- CLOUD - Shading or not the area between the channels.
The default parameters are used for the H1 timeframe. Typical rate of change of major quotes is 0.3% per day: PERIOD = 24, PERCENT = 0.3
When the price arrives in the upward channel, it means that during the PERIOD there are bulls whose profitability is PERCENTS and they can close the position by starting a reversal.
When the price reaches the center line, it means that the open purchases brought the PERCENTS to most of the traders and the probability of a reversal is very high.
Achievement of the price at the end of the channel signals an impulse - all the bulls behind PERIOD make a profit of at least PERCENTS. And a significant part of them will close the position.