After I developed an indicator that detects the support and resistance lines of the last X bars I tied it into an expert advisor. If those lines are has a similar slope then it is a channel.
I ran a few back tests and the channel detection functionality looked fine. Then I wrote the expert advisor and tweaked it according to a few visual back tests.
Then I had a problem: I am expecting that a really good EA should keep the results statistics. It should not keep the profit factor the same but if the idea is logically right then a profitable EA should stay profitable along the time line. This one had really good results in one week and in the following week the results were the opposite.
I tested it on time frame of 15 minutes. It created around 20-30 trades per week. It means that the strategy won't be profitable every week. The market will trade in linear channels in one week and then it would break them out on the next week.
Conclusion: I developed a great indicator that may be embedded in another trading strategy or as manual trading tool but it can't hold the strategy I've been looking for.
I didn't give up on channel trading yet. My next shot will be designing a trading strategy based on Bolinger band based channels.
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