Types of Channels

[TheWolf]

I read that there are two main types of channels:

1. Straight envelopes - 'Straight envelopes keep a steady distance from a moving average - providing steadier targets. '
2. Standard deviation channels (also known as Bollinger bands)

I know I can get Bollinger bands on graphs, but how about 'straight envelopes'? How do I get them on graphs?

Lastly, which type of channels would you use in different circumstances?

Thanks.

 

[jonboy123]

IG index have channels function on advanced charts.
Just tweak it up... im trying to learn how to draw them too....not much info around....

No one seems to be using straight envelopes on this board...i made a thread about it.....and no one
said much on it....

 

[Calinor]

Another type of channel is the trendline channel which I prefer to both of those you mentioned.

You can get envelope channels by plotting the moving average and then adjusting the 'vertical shift' up and down, if your charting package allows that. Alternatively, just code it yourself, it isn't hard.

 

[jonboy123]

Another type of channel is the trendline channel which I prefer to both of those you mentioned.

You can get envelope channels by plotting the moving average and then adjusting the 'vertical shift' up and down, if your charting package allows that. Alternatively, just code it yourself, it isn't hard.

hi, thanks.
can you help me draw a good envelope?
Yes i have IG Index advanced charts, whihc have the channel/envelope feature.
But i dont know exactly how to set it up....
Im trying to do what alexander elder speaks about in his books.

Trendline channel? like small trading ranges...i think i know waht you mean...

 

[squall321]

No one seems to be using straight envelopes on this board...i made a thread about it.....and no one
said much on it....

i use channels and i'm sure i explained it all on that thread

plot one ma and two channel lines
shift one channel line up to touch the peaks
shift one chanel line down to touch the troughs

its not rocket surgery jon boy

 

[jonboy123]

i use channels and i'm sure i explained it all on that thread

plot one ma and two channel lines
shift one channel line up to touch the peaks
shift one chanel line down to touch the troughs

its not rocket surgery jon boy

are you using IG advanced charts?
if im using 20EMA
Do i need to use that 20 figure as the nbr on the channel settings?
one envelope = 2 lines, so when i shift the setting, both lines shift....

yeah ive prbably done it...or got close to it.....but i jsut wanna get it right so i can do it when are where i please in confidence.....

 

[squall321]

are you using IG advanced charts?
if im using 20EMA
Do i need to use that 20 figure as the nbr on the channel settings?
one envelope = 2 lines, so when i shift the setting, both lines shift....

yeah ive prbably done it...or got close to it.....but i jsut wanna get it right so i can do it when are where i please in confidence.....

yes same 20 nbr on envelopes

use a negative number to shift it downwards

ie
upper envlope = 1
lower envelope = -1

 

[squall321]

Another type of channel is the trendline channel which I prefer to both of those you mentioned.

yea trendline channel is the best, and i will use that first

but how often does a "textbook" trendline channel show up in real life?

 

[jonboy123]

yes same 20 nbr on envelopes

use a negative number to shift it downwards

ie
upper envlope = 1
lower envelope = -1

but say i type in 3.5 on the +envelope.....when i go to the -envelope.....that is automatically changed to 3.5 also.... i cant do two diff vertical shift settings....when i change one...the other one is also....

i seemed to get a tighter envelope when i decresed the Nbr figure....is this not the way to do it?

i dont think using a - minus figure makes a diff....

or do i need to open up TWO instances of the envelop?...in effect making 4 lines on the chart...?

(man im sorry...)

i think we can only choose a distance from the MA...and EQUAL distance on both sides......

 

[squall321]

forget the envelope thing

just draw three moving averages
leave one where it is
shift one +
shift if -

ok well ig charts aren't working for me, but i went to proerealtime which is the same software

apparntly you don't need to put a minus number for this shift on lower envelope, i guess that's just for shifting an ma

but i dunno how it can't be working, it draws the two channel/envelope lines simulatanously, already shifted, so whats' the problem??

 

[jonboy123]

3 moving averages? .... actaully that could work....ill try that.....
thankyou so much... youve been a great help.

yeah "verticle shift" in % terms...

ill have a play around. cheers.

 

[squall321]

i think we can only choose a distance from the MA...and EQUAL distance on both sides......

yea i got you now, the envelopes keep equal distance on this chart software

man, just allow this envelope indicator thing!

draw the mas instead lol

 

[jonboy123]

lol yeah i know, its been bothering me for weeks! lol
its strange though...whey would tehy show us envelop - and evnelope + settings, if we cant change them independently.... and the zoom changes too....

i did think about trying to email Elder himself about this...

mas? dont know what that is!

 

[squall321]

mas = moving averages

elder will probably charge you money for an answer

and **** knows, it-finance charts are the most confusing basketcase charting software i've ever seen

 

[jonboy123]

lol can proabably hit elder up on myspace or facebook.....lol

or just lead him to belive im a beautfiul blonde with big t**s and aSS....he wont charge me then....

IT advanced charts = not user friendly.....i had to speak to IG support to find out how to change the bars to candles...and im computer software savvy!

 

[jonboy123]

trendline channel

can someone show me picture of what this looks like?

like this?

 

[Calinor]

but how often does a "textbook" trendline channel show up in real life?

Well I have one on every chart I trade from. But yeah the 3 perfect touches type trendlines are rare on the longer time-frames, but you can get away with less than perfect trendlines, or short term trendlines. Or you will have a 2-touch trendline, and you're waiting for the 3rd touch a lot of the time. I actually find them more useful as a place to take profits on the opposite end of the channel, or when they fail. But anyway, that's another topic

Yeah Jonboy that's the idea of them. I might draw mine differently, but yours seems fine too. It can give you a decent entry point, a decent exit point, a decent place to trail your stop behind maybe. And when the trendline fails, that can be useful too


By the way, a long time ago when I was reading John Carter's book, and was interested in Squeeze's, I coded up the keltner Channels and a squeeze indicator. The Keltner channel is below (there are different versions of the keltner channel where numbers are adjusted)

UP=2*AverageTrueRange[10](close)+ExponentialAverage[20](close)
DOWN=ExponentialAverage[20](close)-2*AverageTrueRange[10](close)

RETURN UP AS "Keltner-Up", DOWN AS "Keltner-Lo"

I include this, not because I think you should use keltner channels. But to show how easy it is to code some channels on IG-Advanced charts. And so if you don't want to adjust by % (i.e. you want to have moving average channels which is 10 points from the central moving average or whatever) you can just create the code, and play around with it.