What it means
A price channel is two parallel trendlines that contain price action in a trending move: upper trendline connects swing highs, lower connects swing lows. Up-channel slopes up, down-channel slopes down. Width of the channel reflects volatility; touches on both lines validate the channel's trend.
Why it matters
Channels visualize trend health — as long as price respects both trendlines, the trend is intact. Channel breaks (price closing outside on either side) are early signals of trend change or acceleration.
How to use it
Use the channel for trend-aligned trades: in an up-channel, buy near the lower trendline with stop just below; sell near the upper. Channel break with volume expansion signals trend exhaustion. Channel acceleration (breaks above the upper in an up-channel) often precedes a blow-off top.
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