When prices are running ups and downs within two parallel trend lines, we called it as a Trading Channel/Band. To draw this channel, we should draw the primary trend line first. This primary trend line is usually drawn below the troughs for an uptrend and above the peaks for a downtrend. Afterwards, we can draw a second line parallel to the primary trend line.

A channel can be used to identify opportunities for long-term or short-term profit. When there are not any substantial changes in the substance of the securities or changes in the market environment, securities prices tends to move within the Trading Channel. Otherwise, prices falling below the lower channel line may imply a weakening price pattern, whereas the breakout of the upper channel trend line may embark an acceleration of the existing uptrend. In other words, price moving beyond the range of the Trading Channel (e.g. 5%) may indicate a trend reversal.

The Trading Channel shown on the above chart can be drawn in our Java Charting System in the following ways:

1. Click for an appropriate button (i.e. "Trading Channel") shown on the bottom of the left hand side on our Charting System;
2. Draw the first straight line by: (i) left click your mouse to set for your starting point as indicated by the cursor; and (ii) release the button when you want to fix the appropriate line on the screen;
3. Then, you will observe another parallel straight line shown on the screen which is moving along with your cursor; you should simply left click your mouse again in order to fix the position of the parallel line;
4. If you wish to clear such ruler, just simply right click your mouse.