Adichael J Parsons

Mini channel breakout

When a market is unclear about a channel parameter you will often have
instead smaller channels that develop somewhat li ke stair steps.
Obviously, there is a trend in there somewhere, but it is difficult to put your
finger on its limits. By using a similar approach as we did with the
rebound entry we still have the ability to trade such an obscure trend. The
difference here is that rather than based on the break of a larger channel you
are simply looking for smaller channels to repeat a break in the same
direction. So in a sense this entry is based on what could be referred to as
mini-channel breaks.
The basic concept fol lows these steps: A market breaks a channel,
whether large or small, and then forms a mini-channel. If the mini-
channel breaks in the same direction as before and continues the trend
direction you then enter at the break. A stop is set just before the mini-
channel zone that was used to signal the entry. Figure 2-4 demonstrates
the technique.

Later. a channel line will develop that Will replace the use of mini

British Pound

This method of entry has a higher risk associated with it as part of the
deal, but it does resolve a few scenarios where entering would normally
be a real problem. Just remember, you are looking for a secondary break
in the same direction, one right after the other. If you have a market that
breaks a mini channel in the opposite direction in-between the two then
this approach will not work. To be valid you must have a market stepping
either up or down, not both ways.

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