SHI Channel
A great SHI Channel indicator for trading with the channel. It helps draw resistance and support levels where the price is likely to reverse.
Description
One of the basic skills of trading is drawing trendlines. This helps you identify trading opportunities when the price moves in a channel. When you draw the lines correctly, you can easily identify areas where the price is likely to reverse. But you don’t have to do all the donkey work of drawing the channel. The SHI Channel indicator does the job for you. Simply run the indicator, and it plots the channel on the chart for you.
You can use the indicator to trade any instruments. But it only works when the instruments are moving within a channel.
How to Trade using the Signal
The SHI Channel has three lines. The upper lines act as resistance, while the low line is the support. The upper line is formed by connecting the swing high, while the lower lines connect the swing low. The center line is the median of the two lines. Simply open a buy order when the price touches the support line and short the position when the price touches the resistance line.
SHI Channel Trading Example
The shi channel indicator shows a EURGBP channel trending within a channel. Notice how the currency pair rebounds after hitting the channel lines. You will therefore want to wait for the currency pair to hit the support line, enter a long position, and sell when the line hits the resistance line. The price range within the channel is over 200 pips.
Conclusion
The shi channels are a great addition for channel traders. It helps you identify areas where the price will likely reverse within a certain trend. You can use it as a standalone strategy or in combination with other indicators.