Trend channels, also known as price channels, are a technical analysis tool used to identify trends in financial markets. They are created by drawing parallel lines above and below a trendline, with the trendline representing the overall direction of the trend. The upper line is drawn by connecting the highs of the price action, while the lower line is drawn by connecting the lows. This creates a channel that encompasses the price action and can help traders identify key levels of support and resistance. By understanding the trend channels, traders can gain insight into potential price movements and make informed trading decisions.

Trend channels are technical analysis tools used by traders to identify and follow the direction of market trends. A trend channel consists of two parallel lines: the trendline and the channel line. The trendline connects either the higher lows in an uptrend or the lower highs in a downtrend, while the channel line runs parallel, forming a boundary on the opposite side. These channels help traders visualise support and resistance levels within a trend. Prices tend to oscillate between the two lines, and breakouts above or below the channel can signal potential reversals or trend accelerations. There are three types of trend channels: ascending, descending, and horizontal. Using trend channels helps traders make informed entry, exit, and risk management decisions.