Channel
A pair of parallel trendlines enclosing price movement, one along the swing highs and one along the swing lows.
How it is identified
Test: an upper and a lower line of equal slope contain the price series over the period examined
Unit
qualitative
In depth
A channel is a trendline with a parallel copy, and it inherits every subjectivity of the trendline plus the additional assumption that the boundaries are parallel, which real price series only approximate. Its practical use is descriptive: it states a band and therefore two levels at which a view would be reconsidered. Traders sometimes use channel width to size stops, which is more defensible than treating the boundaries as reliable turning points. As with every construct here, a channel describes the past; nothing about it predicts that price will remain inside it.
Worked example
A channel with a lower line at ₹495 and an upper at ₹545 is ₹50 wide, about 10% of price. A stop placed ₹5 below the lower line risks ₹55 from the upper boundary — the geometry, not a forecast, is what sizes the position.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Channel” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.