Channeling
Channeling is a technique where you draw parallel trendlines to contain an impulse wave and project where future waves will terminate. You start by connecting the end of Wave 1 and Wave 3 with a line, then draw a parallel from the end of Wave 2. This parallel often marks the target zone for Wave 5. After Wave 4 completes, you can refine the channel by drawing a line from Wave 2 through Wave 4 and projecting a parallel from Wave 3. This gives you a more accurate upper boundary. When Wave 5 reaches the upper channel line, that's your signal to watch for reversal. Throw-overs happen when Wave 5 briefly breaks above the upper channel line before reversing, and these are especially common in ending diagonals. If prices fail to reach the channel line, it signals weakness and suggests the trend may be losing momentum. Channeling works best in clean impulse waves and gives you a visual framework that complements your Fibonacci targets.
In a five-wave advance on EUR/USD, you draw a line from the Wave 2 low through the Wave 4 low and project a parallel from the Wave 3 high. Wave 5 rallies right into that upper parallel line at 1.1250, stalls, and reverses. The channel gave you the exit signal before any indicator confirmed the turn.