Channels

[rtace]

I was wondering If anyone trades channels
such as gbn

http://stockcharts.com/h-sc/ui?s=GBN&p=D&yr=0&mn=6&dy=0&id=p74541994824&a=111094974&listNum=1
found CENTA using a scan, with improving rsi, and it seems to be in a channel also

http://stockcharts.com/h-sc/ui?s=CENTA&p=D&b=5&g=0&id=p73055857711&a=111181871

Just wondering what kinda scan, say using stockcharts would pick up these types of patterns.
and just curious to the general consensus on the profitability of channels

hopefully those links work

[Disqplay]

There are many types of channels that could be used for choosing stocks in the example provided the channel is formed by bollinger bands typically 2 standard deviation away from the choosen simple moving average of price. The theory behind this particular set up is that the trades are made when the bands come closer together this will indicate a change in volitilaty and hence in change or price direction either up or down depending on the original movement of the stock.

Other types of channels can be formed by using just a trading range over a period of time. It really does not matter what type of channel you trade so long as other technical indicators support or reject what the channel is telling you.

I personally use price and volume locked together to give me an indication of how the stock should move using yearly quarterly monthly and weekly prices to form the channels.

Disq