Trend Channel
a.k.a. Price channel, Channel
Two parallel lines drawn around a trending price, one along the highs and one along the lows.
In plain English
Two parallel lines drawn around a trending price, one along the highs and one along the lows.
A trend channel is a pair of parallel trend lines that box in a trend. In an uptrend, you draw one line along the rising lows and a matching line along the highs. Price bounces between them like a ball rolling down a gutter.
Traders use the lower line as a place to look for buys and the upper line as a place to take profit, in an uptrend. A clean break out of the channel can warn that the trend is speeding up, or ending. See also ascending and descending channels.
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