Price Channel


DEFINITION of 'Price Channel'

The price action contained between two parallel lines in a trend. In a price channel, the lower line is the trendline drawn on pivot lows, and the upper line is the channel line drawn on pivot highs. The two lines of a channel represent support and resistance. In an uptrend, for instance, a trade might be entered at the support of the trendline (shown by the green arrows in the chart) and exited at resistance of the upper channel line (shown by the red arrows). Channels show trend direction for any time frame. Trend, or price channels, can be up, down or sideways.

Price Channel

BREAKING DOWN 'Price Channel'

All the forces of supply and demand are represented by price. The dominance of one force creates trend direction. Trend channels occur in all time frames and every asset class, such as futures, stocks, mutual funds, etc., and are useful for trading or investing.

  1. Descending Channel

    A descending channel or downtrend is the price action contained ...
  2. Ascending Channel

    An ascending channel is the price action contained between upward ...
  3. Horizontal Channel

    Using trendlines to connect variable pivot highs and lows shows ...
  4. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  5. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
  6. Channel

    1. The system of intermediaries between the producers, suppliers, ...
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