Channels

A “channel” occurs when both a high trendline and a low trendline have been found in the same general time frame. In the text underneath the channel charts, there are a couple of different terms used to describe channels.

Slope

If both the upper trendline and the lower trendline are slanting upward, the channel will be described as “rising”. If both trendlines are slanting downward, the channel will be described as “falling”. However, if one trendline is slanting up and the other is slanting down, then the slope of the channel will be taken from the average slope of the two trendlines, and the channel’s slope will be described as either “upward-sloping” or “downward-sloping”. As such, a channel whose slope is described as “rising” or “falling” can be considered more reliable than one described as just “upward-sloping” or “downward-sloping”.

Converging/Diverging

“Converging” means the trendlines are getting closer together as they approach the right side of the chart. “Diverging” means they are getting further apart. In general, converging channels are stronger than diverging channels. Eventually I will figure out a workable definition for “parallel” but so far I haven’t been able to determine how close is close enough to be called parallel.