Common Mistakes While Drawing a Parallel Channel Chart Pattern
- Forcing lines to fit the price.
- Ignoring minor wicks or shadows.
- Drawing based on closing prices only.
Remember, a valid channel should touch at least two points (Most Important) on both upper and lower lines.
How to Identify a Valid Parallel Channel Chart Pattern
A valid channel must have:
- At least two touches on both trendlines.
- A consistent slope (upward, downward, or flat).
- Smooth, flowing price movement within boundaries.
- Also, respect for the middle line.
If prices repeatedly respect the channel lines, it’s a strong and tradable pattern.
