Horizontal Trend Channel

Horizontal Trend Channel
These channels are explained as the chart designs which are used in the technical analysis. Like the descending and ascending trend channel, these trend channels are created by drawing trend lines for both low and high prices on the chart. If the asset costs remain reasonable fixed for certain time period, the slope of the trendlines which are used in chart appears in a horizontal way, thus forming the horizontal channel. Like all the trend channels, a disruption inthe costs outside the trend line represents a buying or selling signal to the traders. If the costs break over the upper resistance trend line for high costs, a buying signal is formed. If the costs break under the low support trend line, a selling signal is formed. Most of the traders think that this trend channel do not represent the horizontal trend but a temporary breakin the prevailing trend in any of the direction. In an alternative way, one could think that the horizontal channel represents calmness prior to the storm of the important trend reversal.