http://earningchannel.money/wp-content/uploads/2017/02/11.jpg 533 800 bouncin http://earningchannel.money/wp-content/uploads/2017/02/Earning-Logo.png bouncin2017-02-08 15:23:162017-03-15 15:56:08How does Channel Trading work?
- Basic method:
- Spot the formation of a channel as early as possible, check its fundamentals and other criteria. Gradually build up a position as the channel forms.
- Sell some stock when the price bounces off the resistance line.
- Buy more stock when the price bounces back from the support line.
- When a channel changes shape:
- Close out the position as soon as the channel changes direction, either from upwards to downwards, or from downwards to upwards.
- If the direction remains unchanged, but the slope becomes steeper, buy or short more stock. When the slope becomes too steep, re-check the fundamentals; it may be a good time to take most of the profit.
- If the direction remains changed, while the slope becomes flatter, buy or sell less. When the slope becomes too flat, re-check the fundamentals, you may want to downgrade the stock from fast grower to slow grower, or just replace it.
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