## Channel designation on the chart
The indicator automatically draws the current price channel within which the price moves:
* **Red channel** - downward local trend
* **Green channel** - upward local trend
* **Yellow channel** - sideways movement, market equilibrium
* The steeper the slope — the stronger the trend💪
{% tabs %}
{% tab title="Upward channel" %}
{% endtab %}
{% tab title="Downward channel" %}
{% endtab %}
{% tab title="Sideways" %}
{% endtab %}
{% endtabs %}
## Using the Channel in trading
The price channel is often used as a trend area from which the price can bounce, since the price can remain within the channel boundaries for a long time:
* The lower boundary acts as support where the price can find a foothold — at this moment consider buy trades
* The upper boundary of the channel often acts as resistance where the price can slow down or reverse — at this moment consider sell trades
* The central line works similarly and also acts as support and resistance
* Use the channel direction to filter out false signals against the trend
{% hint style="success" %}
First of all, try the simplest [strategy with a price channel](/faq-en/simple-strategies.md#strategiya-torgovlya-v-kanale) from the indicator developer
{% endhint %}
{% tabs %}
{% tab title="Bounces in a downward channel" %}
The example shows how the price slows down as it approaches the lower boundary of the channel, then a reversal follows. Similarly, we see how the price reacts from the upper boundaries of the channel.
A safe option — in a downward channel trade from the upper boundaries in continuation of the bearish trend.
{% endtab %}
{% tab title="Bounces in an upward channel" %}
The example shows how the price slows down as it approaches the lower boundary of the channel, then a reversal follows and further continuation of the upward trend
A safe option — in an upward channel trade from the lower boundaries in continuation of the bullish trend.
{% endtab %}
{% tab title="Bounces off the central line" %}
The example shows how the price slows down as it approaches the central boundary of the channel, then a bounce and continuation of the impulse follow, and when the price broke through the central line — it became resistance.
{% endtab %}
{% endtabs %}
The channel width is used to assess volatility:
* Wide channel — high volatility and a strong trend
* Narrow channel — weak trend or price consolidation
{% hint style="info" %}
When the channel narrows, the price consolidates — it is stretched like a spring. This indicates a strong impulse in the near future. Often the direction of the impulse marks the beginning of a strong trend.
{% endhint %}
{% tabs %}
{% tab title="Wide channel" %}
The example shows that the channel width equals 52% of the net movement, indicating high asset volatility.
{% endtab %}
{% tab title="Narrow channel" %}
The example shows that the channel width is only 2% of the net movement, indicating low asset volatility and its consolidation.
{% endtab %}
{% endtabs %}
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