so I got a lot of feedback and questions
regarding dungeon channel trading and in
this video I will show you how to use it
what it is and how it can benefit your
trading so the dungeon channel was also
used by the famous turtle trader group
and a quick Google search on turtle
trader will provide a lot of important
and interesting information and in this
video I will show you the different use
cases for the dungeon Channel and when
we start at the basics what you need to
know is that the dungeon channel is
usually set to 20 periods and what it
does it just plots the highest and the
lowest point during the last 20 candles
so right now this is the current price
you can see the dungeon channel is up
here and the dungeon channel is down
here and when we go back 20 candles this
is the range so here's the range where
the 20 candles start and the lowest
price point during this period was here
that is why the low of the dungeon
channel is here and the highest point
over those 20 candles is here so that is
why the don't you can't a channel is
calculated that way if the price moves
higher the dungeon channel will shift
higher as well and this is how it is
going to look like and the dungeon
channel is often it is mostly used for
trend-following trading and during
strong training markets you will see
that the dungeon channel continuously
shifts high and shifts higher and this
is how it is what is this how it
describes trend trading strategy or
trending markets at least and during a
trend trending market you will see that
the lows are obviously also coming
higher and the market is not touching
the low points and as long as the market
doesn't touch the low of the Butantan
channel usually a trending market is
still active and we will see later how
we can use this information so during a
strong training price the price usually
stays below the outer band
always stays below the Ottoman because
it shifts as soon as it touches this end
above a moving average so in this
example I used the 20-period moving
average and a 20 period dungeon channel
and you can see at the down side we have
the trench rider who complements this
information nicely so the market was
always trading above the moving average
the market kept pushing the dungeon
channel higher it even even come close
to the dungeon channel on the lower side
and the trend rider was always green
here during this trending market
confirming the bullishness of this price
action and then it was not until here
where the market failed to reach the
dungeon Channel and broke through the
moving average and also touched the
outer and the lower ban of the dungeon
Channel that a trend is now likely to be
over and as soon as this happens you may
exit your long position if you have been
riding such an uptrend those are clear
signals that the market is losing
strength and that the trend is likely to
be over so here we have another same
example that is describing this
confirmed concept so during the training
market the price stays above the moving
average it stays here very high and it
keeps pushing the the dungeon channel
higher and higher as on every breakout
and every trend continuation but then it
fails to reach the outer band and it
also breaks below the moving average
here so those are very very important
factors when it comes to looking at
trend strength and understanding and
estimating how strong is the trend
really and if you see those two things
happening it's often a good indication
that the trend is likely to be over and
you can see the market then pushed into
new low here we have the breakout of the
moving average again the price did not
reach the opposite side of the dungeon
channel which is an important tell
because shortly after the market pushed
into your new low and continued a
downtrend so some traders may exit their
short positions here if you have been
short but if you see that the market is
not able to reach the opposite side and
then fails lower this may be used as a
trend continuation because the market is
not able to push into
new highs so at no point ever since here
the market was able to push into your
new high which is in a very very
important piece of information when you
try to understand trend momentum and
then the market kept pushing lower and
lower until this point now it fails to
reach the Bollinger at a finish not to
Bollinger but the dungeon Channel and it
breaks the moving average and the third
piece to the puzzle
it is making now a higher low so this is
a higher high actually because the
market is pushing the dungeon channel
higher which it did not do here so here
we didn't have a strong up trending
signal but here now we do and then the
trend continued higher and higher and
higher and all of those things came
together the the failed move into the
dungeon channel the break of the moving
average and the final piece to the
puzzle is that the dungeon journal
shifted higher with the breakout into
new high he had the market try to make
an attempt to continue the downtrend but
it failed the market was never able to
push into your new dungeon Channel oh
and then the trend continuation
continued so that's a very very P
important piece of information that the
dungeon channels and the price action
can provide us about trending markets
here we have another very important and
interesting case study so the market
traded below the moving average and it
kept making lows and the way this is
often used is that there are two ways
pullback approach would use for entries
around the moving average when the price
is pulling into a moving average or
trend continuation breakout traders are
looking for situations where the market
is shifting the dungeon Channel when the
dungeon channel is pushed lower the
trend is continued and some traders may
use for entry opportunities on such
dungeon Channel breakouts and then the
trend continued continued here it
retested the moving average again but it
never broke it here we have our final
push we have the break of the moving
average now at this point the market did
try to break below the moving average
which it succeeded in but it never came
close to the previous low it never came
close to the dungeon Channel and then
here at this point a market shifted to
breaking into a launching channel high
it
triggered the dungeon channel it moved
it higher than the trend continued and
continued and continued until we have
there's one two three four five touch
top here at this point the market was
barely barely able to shift them the
dungeon channel higher which is an
important piece of information during a
strong trading market you will see that
the market is continuously shifting the
the dungeon channel lower or higher
without any effort but here you can't
see those pushes and those well
enhancements off the dungeon channel are
very very weak you can put a trendline
in here as well then you have the trend
line break you have the moving average
break you have the information here that
the dungeon channel breakout is very
weak and then the downtrend is here
starting so many ways how the dungeon
channel may add information to your own
trading again the moving average is
really really a powerful tool that we
can use for dungeon channel trading you
can see here we have the uptrend the
market shifts the dungeon channel higher
very very easily without any effort and
many breakouts into the dungeon channel
happen until this point we break below
the moving average you retest the moving
average and then here we trade into the
dungeon channel shifting the dungeon
channel lower and this is often the
signal that after an uptrend market now
the done downtrend is likely to get
started and this is what happens we
shift the moved on TNT and lower and
lower and lower until the market breaks
the moving average until here we shift
the dungeon channel upwards and then a
new up training face may start so really
really powerful information that a
dungeon channel is providing about
trending markets so we can also
obviously include dungeon channels with
our side emergencies and here during
this uptrend you can see first the
market was able to push higher very very
easily the dungeon channel continuously
moves higher and higher until this point
where the market barely shifts able
shifts the dungeon channel higher is
barely able to make it a higher high and
this is also confirmed by this momentum
divergence on the RSI indicator the RSI
is showing us lower highs price action
is showing us very weak higher high
and then we have the complete collapse
the break below the moving average the
push inside the outer and the lower
dungeon channel the pullback and then
the continuation and a trend now emerges
so those are very very important pieces
to the puzzle when the market is
shifting and it may improve your
confidence significantly once you see
that there are so many confluence
vectors pointing to a potential not only
a trend end but also due to a new
trending change and this may improve
your analysis and your price and also
significantly I often get asked is the
dungeon Channel the same as the
Bollinger Bands and the answer is no
they are not the same but they are very
very similar the dungeon channel only
looks at absolute price highs and price
lows and price ranges but the the
Bollinger Bands also uses a volatility
component so what this means is that
during strong trending markets you will
see that the dungeon channel is plotted
here in red is widening you can see it
here as well and doing small
consolidations the dungeon channel is
contracting because the don't you the
the Bollinger Bands sorry because the
Bollinger Bands is volatility based and
doesn't look at the price high and load
that much the dungeon channel will never
cut through price action whereas on the
Bollinger Bands you will often see
spikes and actually the market closing
above the moving air at the Bollinger
Band doing a very very strong trending
market this is not possible during or
with the dungeon channels one way how
I've seen the dungeon channel and the
Bollinger Bands used is that when a
trend is closing outside the Bollinger
Bands and very into a new dungeon
channel this are even stronger trend
continuation signals so we see during
very strong trending markets that the
price is trading between the Bollinger
Band and the dungeon channel something
to explore may be new or trading because
this may add another layer of
information to your nurses but that's
the main difference between the two
indicators and that's it for this video
I hope you enjoyed it let me know in the
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