Price Channel
Definition
A price channel is two parallel lines that contain a trend: a trendline along the swing lows and a parallel line along the swing highs.
Detailed Explanation
To draw one, connect the rising swing lows, then copy that line up to the highest swing high between them. The lower line gives pullback entries in an uptrend, and the upper line gives a natural place to take profit, since price has already turned there once. A channel is a description of the recent past, so it fails the moment the slope changes. When price stops reaching the upper line it can be an early sign of a weakening trend, and a close through the lower line ends the trade idea altogether.
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