love it! As I’m sure you’re aware, not all exchanges/brokers offer fractional trading. so it’s very important to understand the above concept. Dont go busting your own rules. Plan your trade and trade your plan.

Try using the logarithmic price scale when you are dealing with a stock that has gone from a low price to a fairly high price in a short amount of time.

Logarithmic scale plots equidistances on the chart based on percentage change in price, not absolute change. It will help you identify macro trends a little easier.

we can see how price got away from that trendline for a long time before we saw a break of it. This doesnt invalidate the line by any means but it does mean we might have to find other ways to identify the trend changing by using things like momentum and divergences (that you will soon learn about)

Some things to note:

Your labeled 2,3,4,5 touches are just considered as one touch to the trendline – but they certainly help label that second touch as a very strong touch and can help add confidence to the trendline.

This example does highlight the fact that sometimes after the break of such a large macro trendline, that the selling pressure will put in a lower low after the initial break. As a long term swing trader mindset – you would want to wait until you saw price holding above those lows and starting to put in higher highs and higher lows. sometime around that march 2023 area would be optimal to have put on a size trade. The risk is very easy to identify from that point on.

https://www.tradingview.com/x/iGFkYQXj/

Here is an example on TSLA, we can see that we have three touches to the top trendline and a strong two at the bottom. We can see some interaction with the heartline too.

We can see a clear move into the pattern, the pattern, and the resolution of the pattern in my example.

Do we want to see more than 2 touches at either boundary – yes, but often times when price is ready to break out to the upside, we will see price struggle to get to the bottom trendline again. especially if the channel is a counter trend move to strong bullish move.

The duration of the channel is well outside of the periodicity of your chart. With a correctly drawn channel of that size and scope, we would certainly be anticipating a much larger resolution than the one that occurred. Therefore this example becomes suspect.

Although the price action rides the heartline of this channel nicely, the outside boundaries of the channel are much more important than the middle line. Confidence comes from the boundaries of this pattern because we are trying to trade the resolution of the pattern when price finally extends outside of the ranging price action.

You are zoomed to far out on the daily chart looking for massive channels. Zoom in on smaller legs of money to find tradable patterns.

Resubmit another channel with a trading view screenshot link in a new comment below this one. Dont submit a new submission this way you can keep all your work in these threads and we can discuss in one thread.

1. You do not have an origin point on the top trend line. In fact we do not see an actual touch until the end of your channel.
2. The time spent between your bottom two touches is months. You are on a daily chart.

The subjectivity of interpretation between classical patterns is the reason why many traders fail. The importance of classical patterns is the resolution after the pattern is complete. It becomes mission critical to keep strict and accurate lines. An accurate and correctly identified pattern will give us early entries and exits because of the confidence we can apply knowing that our analysis was done to the best of our abilities.

The importance of a channel is to identify ranging price action. With this, we need to make sure that we see multiple touches to both trendlines. This helps us gain the confidence in trading the breakout of that level because we now know how strong of a level it was based on the validity of the trendlines.

Also keep in mind, if you are on a daily chart we should not be looking for channels that are nearly 7 months in duration. The daily chart we should be looking for channels that last a few weeks to a maybe 2 months. Try zooming in on the daily chart on smaller waves of money and see if you can identify smaller channels that proved resolution at the completion of the pattern.

The purpose of these homeworks is to find the strongest examples of these patterns, so that you can have a book of examples to reference, study, and use to make judgements in the future. So do not hand in homework examples that do not show any resolution.

With any classical pattern there will be price action that leads to the pattern, the price action of the pattern itself, and the price action of the resolution. Make sure each example you are handing in, correctly identifies that.

Feel free to submit a new chart by simply copying and pasting a tradingchart screen shot link in a new comment below.