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Al said that the trend slows down and goes through the breakout, tight channel, broad channel, trading range but is there a specific moment when a broad channel becomes a trading range?
Hi Newton,
I'm guessing by trading range you're referring to a classic flat trading range. However, trading range is more of an umbrella term. Broad channels, triangles, final flags etc. are all types of trading ranges. Broad channels get the name because there's usually two sided trading involved so even though the channel is sloped slightly up or down it's still possible to trade it by selling highs and buying bottoms.
I suppose one way you can tell if it's a classic flat TR is by how easy it is to sell tops and buy bottoms and also how easy it is to draw the bounding box around it with flat TL above and below, instead of sloping lines. However, as Al often says in webinars, it doesn't matter what you call it, it's probably more important to look for what kind of trading is dominating: are both sides able to make money easily with stops or is one side only able to profit mostly with limits?
Hope that helped!
CH
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BPA Telegram Chat is following the breadcrumbs Breakout -> Channel -> TR -> Breakout
Thank you!
