This strategy works best with H1 and H4 timeframes. To identify a channel on the chart a trader should connect several highs or lows which will be the borders of the channel. There is a useful tool in MT4, called Equidistant Channel, which will help to identify channels.
Custom indicators, such as “MTF shi channel” can also be used. In this case trader should put the file !_MTF_shi_channel_1.mq4 into the folder C:\Program Files \папка, где установлен терминал\experts\indicators, restart trading platform and then drag-and-drop indicator to the chart from the list.
Once the price channel is drawn, entry points become obvious. Buy orders should be placed at the lower border, sell orders — at the upper one. However, if you trade against an overall trend, do not forget about “Stop Loss” orders.
Targets for the trades are on the opposite side of the channel. "Stop Loss" order should be placed one channel’s width apart from the entry point. (Width of the channel is the shortest distance between its borders). Once the position is profitable, "Stop Loss" can be moved to break-even zone and “Trailing Stop” tool can be set up.