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Forex Ensiklopedia

Channel and trading range

Wide-spread situation on the forex market is when movement of price on the chart takes place in a certain range, which is called Channel. Upon that, bottom boundary of this channel is called support line, because it supports the price from decline below the channel level whereas top boundary is called resistance line, because it resists the price leaping up the channel. The distance between those two lines constitutes trading range.

Based on main direction of the price movement, channels are conditionally divided into uptrend, downtrend and range (side) channels.

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