Consolidation Channel Breakouts by Ken Calhoun
When price trends between two parallel trendlines it is said to form a channel, and a consolidation channel is a sideways action where price is in a trading range. This month, this professional trader describes what to look for to have the best chances of success when trading breakouts from this pattern.
Entering breakouts above consolidation channels is a popular trading technique. The challenge you will face when trading with real money is that these will also often produce false breakouts, unless you know how to find specific, strong-trending patterns. The most important criteria you should visually scan for is seeing a prior uptrend before the consolidation channel, above which a new trade can be entered. In this monthís column, Iíll demonstrate how to enter this specific consolidation channel breakout pattern ...