Watch the testing video here:
Working Inside Channel Indicator
Working Channel, PCC is a modified version of the Donchain channel indicator. Instead of the N day High Low range used in Donchain channel, Working Channel uses a certain Working value of the price to draw the channel. As price moves upward or downward, the PCC shows trading opportunities. It is a trend following indicator, and the signals make good profits on long lasting trends.
Price trade inside the channel for considerable period and then breakout from the channel. This is likely to be a new trend beginning. Traders can open buy position when price establishes above the upper channel line. Short position is opened when price trade below the lower channel. Trading activity inside the channel indicates lack of strength in the current trend. Usually in an up trend most of the trading happens inside the upper channel line and mid channel line. In down trend, price action is more likely to confined within the lower channel line and mid channel line.
PCC is used in long time frame charts like daily or weekly charts. The default value for parameter Working in PCC is 2. Test the channel with different values for parameter Working and use the best parameter value for each instrument. The best value for Working depends on the volatility of the instrument. PCC avoids many false signals that occur with other channel indicators in tight trading ranges by choosing a proper value for parameter Working.
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