Question 95—Shorting in Downtrends
Answer 2 Covering near the lower channel line means buying below value.
In the middle of a channel prices are near value. The time to cover shorts and take profits is when prices fall to the undervalued zone near the lower channel line. Channels often provide multiple trading opportunities, as prices keep rising to value only to collapse below value again and again. Grading swing trades by the percentage of a channel captured in that trade works equally well for longs and shorts.
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