price channel(PC)
Price channel indicator was created by Ralph Nelson Eliot .
Price channel are trading indicator with two line,the upper price channel and the lower price channel .Between the two is a green line that separate them and this represent the price oscillation.
The lower price channel normally represent support while the upper price channel represent resistance in the market.
The price channel is based on oversold and overbought in the market.The price channel is also used to indicate the direction of the market.
The upper price channel is the highest high over a given set period while the lower price channel is the lowest low over a given set period.
The price channel has a period of 20.
Price channel is based on Exponential Moving Average(EMA) and therefore is calculated as follows;
Since the price channel is used to indicate the direction of the market,it therefore follows that when the price moves above the upper price channel,that will be an indication of an upward trend thus the trader should be trading in an upwards market..On the other hand when the price moves below the lower price channel,that will an indication of a downward trend thus the trader should be trading in a downwards market.
Since price channel is also based on overbought and oversold in the market it therefore follows that when the price rises above the previous highest high(upper price channel),that will be an indication of an overbought market thus the trader should close any buy position and open a sell position since the market will start moving downwards.On the other hand,when the price falls below the previous lowest low(lower price channel),that will be an indication of an oversold market thus the trader should close any sell position and open a buy position since the market will start moving upwards.This is indicated as from the candle sticks chart below;
From the candle sticks chart above,there are 4 points,point A ,B,C and D.Point A and B represent the direction of the movement of the market due to overbought and oversold in the market while point C represents the lower price channel which is the market support.Point D on the other hand represents the upper price channel which is the market resistance.Between point C and D is a green line which separates the two and it is where the price oscillation takes place.
At point A the price rises above the previous highest high of upper price channel.This signals the trader of an overbought market condition thus informing them to close any buy position and open a sell position since the price is starting to move downwards as indicated by the arrow inside.On the other hand at point B,the price falls below the previous lowest low of lower price channel.This signals the trader of an oversold market condition thus informing them to close any sell position and open a buy position since the price is starting to move upwards as indicated by the arrow inside.
Price channel are trading indicator with two line,the upper price channel and the lower price channel .Between the two is a green line that separate them and this represent the price oscillation.
The lower price channel normally represent support while the upper price channel represent resistance in the market.
The price channel is based on oversold and overbought in the market.The price channel is also used to indicate the direction of the market.
The upper price channel is the highest high over a given set period while the lower price channel is the lowest low over a given set period.
The price channel has a period of 20.
Price channel is based on Exponential Moving Average(EMA) and therefore is calculated as follows;
Price channel upper= EMA(1 + upper price channel%/100)
price channel lower= EMA(1+lower price channel%/100)
Since the price channel is used to indicate the direction of the market,it therefore follows that when the price moves above the upper price channel,that will be an indication of an upward trend thus the trader should be trading in an upwards market..On the other hand when the price moves below the lower price channel,that will an indication of a downward trend thus the trader should be trading in a downwards market.
Since price channel is also based on overbought and oversold in the market it therefore follows that when the price rises above the previous highest high(upper price channel),that will be an indication of an overbought market thus the trader should close any buy position and open a sell position since the market will start moving downwards.On the other hand,when the price falls below the previous lowest low(lower price channel),that will be an indication of an oversold market thus the trader should close any sell position and open a buy position since the market will start moving upwards.This is indicated as from the candle sticks chart below;
From the candle sticks chart above,there are 4 points,point A ,B,C and D.Point A and B represent the direction of the movement of the market due to overbought and oversold in the market while point C represents the lower price channel which is the market support.Point D on the other hand represents the upper price channel which is the market resistance.Between point C and D is a green line which separates the two and it is where the price oscillation takes place.
At point A the price rises above the previous highest high of upper price channel.This signals the trader of an overbought market condition thus informing them to close any buy position and open a sell position since the price is starting to move downwards as indicated by the arrow inside.On the other hand at point B,the price falls below the previous lowest low of lower price channel.This signals the trader of an oversold market condition thus informing them to close any sell position and open a buy position since the price is starting to move upwards as indicated by the arrow inside.
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