Trading Channel

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DEFINITION of 'Trading Channel'

When charting the price of an asset, this is the space on the chart between an asset's support and resistance levels. The price of the asset will stay within the support and resistance levels until a breakout occurs.

INVESTOPEDIA EXPLAINS 'Trading Channel'

Range traders will buy an asset when its price is near the bottom of the trading channel and sell it when the price gets close to the top of the trading channel, making a profit on the price spread. Trading channels may be flat, ascending or descending.

RELATED TERMS
  1. Range

    A stock's low and high prices for a particular trading period, ...
  2. Chartist

    An individual who uses charts or graphs of a security's historical ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Channel

    1. The system of intermediaries between the producers, suppliers, ...
  5. Trading Range

    The spread between the high and low prices traded during a period ...
  6. Range-Bound Trading

    A trading strategy that identifies stocks trading in channels. ...
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