Elliott wave channeling can help you identify price targets and realize how future trends could develop.
A properly drawn channel typically marks the upper and lower boundaries of an impulse wave (a five-wave move in the direction of the trend). Elliott channels are most useful in identifying targets for wave four and five.
To construct the channel, first connect the ends of waves two and four. Draw an upper parallel touching the peak of wave three. Often wave 5 will peak at that line, as illustrated in the chart below.
To learn more about Elliott waves, visit our Educational Resources page.
