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.