The channel calculation algorithm uses the upper and lower boundaries that are separated from the price at a certain different distance. The setting is as simple as possible, apply to certain construction prices.
The indicator works best during periods of stable asset volatility, giving reliable signals on bounces and breakouts of borders and the middle line. Forex statistics show that 90-95% of the time the price moves within the range, so pullbacks are preferable to breakouts. Also, if technical or graphical patterns form between extremes, this will be a good additional confirmation of the pattern.
By trading with the trend, you reduce your risks and gain an advantage, as you increase the mathematical expectation of completed trades and, therefore, earn more profit. Together with the Diesel Channel indicator, you will trade with the trend with ease! This is one of the most effective ways to work with market trends, which has helped to increase the number of profitable trades for more than one hundred traders.
Breakout trading assumes a situation when the price, upon reaching one or another channel border, breaks it and continues the trend outside the channel. In this case, the channel does not matter anymore and the trading continues with the trend. Often a serious impulse is obtained after the channel is broken.
Trading can be carried out inside the channel when the price reaches its borders and turns in the opposite direction from them. In such cases, reversal strategies are used. Channel indicators are designed to work with support and resistance levels and help traders find opportunities to enter the market.