When the price reaches the upper channel line, and indicators such as the MACD histogram show bearish divergence, it is a sell signal. This indicates that the bulls are becoming weak and the price has risen excessively.
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When the price reaches the lower channel line, and the indicators show bullish divergence, it is a buy signal. This indicates that the bears are becoming weak and the price has reached a low point. We must analyze the market across multiple timeframes. When the weekly chart is rising, we should look for buying opportunities on the daily chart. When the weekly chart is falling, we should look for selling opportunities on the daily chart.
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When the channel is rising, go long when approaching the moving average position, and take profits when reaching the upper channel line; when the channel is falling, go short when approaching the moving average position, and take profits when reaching the lower channel line.
When the channel is rising, it is best to trade only in the bullish direction, buying within the value range between the long-term and short-term moving averages, and then selling at the upper channel line position; when the channel is falling, it is best to short within the value range, and then cover positions at the lower channel line position.
