Turtle Channel

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DEFINITION of 'Turtle Channel'

A trading band created by plotting the highest and lowest prices of an asset over a certain time period around the price of that asset.

INVESTOPEDIA EXPLAINS 'Turtle Channel'

This indicator is interpreted in a similar manner to other banded indicators such as Keltner channels and moving average envelopes. Some investors use a move toward the upper band to signal an increased likelihood that the security is becoming overbought, and a move to the lower band to signal that a security may be oversold. Other investors believe that a move beyond the upper band of the channel is an indication that upward momentum is increasing, and a move below the lower band is an indication that downward momentum is building.

RELATED TERMS
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  3. Oversold

    1. A condition in which the price of an underlying asset has ...
  4. Bollinger Band

    A band plotted two standard deviations away from a simple moving ...
  5. Keltner Channel

    A volatility based 'envelope' indicator that measures the movement ...
  6. Envelope

    A type of technical indicator typically formed by two moving ...
RELATED FAQS
  1. What is a common strategy traders implement when using a Turtle Channel?

    The most common trading strategy employed with the turtle channel is the original strategy that the indicator was developed ... Read Full Answer >>
  2. Why is a Turtle Channel important for traders and analysts?

    Like most channel indicators, the turtle channel's importance for traders or market analysts lies in the fact that it is ... Read Full Answer >>
  3. How do I use a Turtle Channel to create a forex trading strategy?

    The turtle channel can easily be used as a trend trading tool and also adapted for swing trading within a trend. The turtle ... Read Full Answer >>
  4. What are the best technical indicators to complement a Turtle Channel?

    The best technical indicators to complement the turtle channel are the moving average convergence divergence (MACD) and an ... Read Full Answer >>
  5. What is the Turtle Channel formula and how is it calculated?

    The turtle channel is intended to circumscribe price in such a way that any breakout from the channel should be a definitive ... Read Full Answer >>
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