use as much as you can,draw yearly then add monthly,daily and keep those on your chart,for the opening you can add 5 minute to that ,and try to determine when the big orders are done,the market is like a big superball bouncing off walls,try to ride it from one wall to another..even if you don't trade that way,if you are a swingtrading it gives you definition for entry and exit ,te more you play with it ,the more repitition you will see you widen or narrow your view according to market range and momentum
A simple price action approach
- Thread starter metal
- Start date
There are a number of different technical approaches to this but basically it comes down to sensitivity and the fact you want the chart to scream at you and be loud and clear in what it is screaming.
A simple technique is to use a Zig Zag indicator and play about with the settings until your eye can see the swings without needing the indicator.
I have attached a chart showing the larger swings. If I used a much finer setting it would catch the point you considered a swing, but then it will also catch so many other vibrations that the chart loses its clarity.
Personally, if I am going to draw a channel I want it to show the most powerful moves and not random blips. Hope that helps - I thought you were taking the piss.
Quote from 1a2b3cppp:
Of course, we're still in an uptrend depending on how you look at it.
Here's another example. For further consideration, some will define a swing by the time taken as well as the price reached. In other words a fast crash would not be a new swing (nor the blip we were discussing in my last post)
In this example we are making lower highs and lower lows in the most recent PA so we are in a downtrend in this time frame. If you say this is not a downtrend because the last major swing low is not penetrated, that is a valid point of view. However it would be difficult to technically have that opinion and consider the first chart we discussed to have a swing slow on at PA blip.
A long trend line (and as you pointed out, a line is not a trend line until it has 3 reaction points) may show the trend is intact, but that is more relevant to a bigger time frame. In the daily time frame the price action trend is down.
In the three charts above, none of the lines have 3 reaction points so they are meaningless. They cannot be classified as trend lines.
... and this is from the Simplicity in TA thread that so profoundly impacted ET 
http://www.elitetrader.com/vb/showthread.php?s=&postid=3177371#post3177371
Which brings me nicely to my final point rather than usurp Metal's thread: all that a trend line does is provide information that helps to qualify PA at that point. You could place a limit order at that point of contact if you reason to expect a reversal, and with a tight stop there would be little to lose and a large RR.
However most times I am looking to the confirmation that traders are backing the reversal before I take my trade.
We have kind of veered off the OP's channels but I think some good points were raised that need clarification as a channel starts off with a trend line.
My channels are very different to Metal's because I want to capture the PA signal in its earliest event rather than use the trend line as the signal, but he has shown very beneficial techniques. It all comes down to what works best for you from the knowledge you have.
http://www.elitetrader.com/vb/showthread.php?s=&postid=3177371#post3177371
Which brings me nicely to my final point rather than usurp Metal's thread: all that a trend line does is provide information that helps to qualify PA at that point. You could place a limit order at that point of contact if you reason to expect a reversal, and with a tight stop there would be little to lose and a large RR.
However most times I am looking to the confirmation that traders are backing the reversal before I take my trade.
We have kind of veered off the OP's channels but I think some good points were raised that need clarification as a channel starts off with a trend line.
My channels are very different to Metal's because I want to capture the PA signal in its earliest event rather than use the trend line as the signal, but he has shown very beneficial techniques. It all comes down to what works best for you from the knowledge you have.