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--- technical_indicators:price_channels [2019/06/24 19:39]
127.0.0.1 external edit
+++ technical_indicators:price_channels [2022/05/11 17:48]
betseyp [Similar to Stochastics]
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 Price Channels are lines set above and below the price of a security. The upper channel is set at the x-period high and the lower channel is set at the x-period low. For a 20-day Price Channel, the upper channel would equal the 20-day high and the lower channel would equal the 20-day low. The dotted centerline is the midpoint between the two channel lines. Price Channels can be used to identify upward thrusts that signal the start of an uptrend or downward plunges that signal the start of a downtrend. Price Channels can also be used to identify overbought or oversold levels within a bigger downtrend or uptrend.
+**Note:** This indicator, developed by Richard Donchian, is sometimes referred to as Donchian Channels.
 ===== Calculation =====
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 ===== Similar to Stochastics =====
-Price Channels are similar to the [[:technical_indicators:stochastic_oscillator_fast_slow_and_full|Stochastic Oscillator]] when one considers what the Stochastic Oscillator measures. This momentum oscillator measures the level of the close relative to the high-low range over a given period of time, say 20 days. The Stochastic Oscillator is relatively high when the close is near the high end of its 20-day range and low when the Stochastic Oscillator is near the low end of this range.
+Price Channels are similar to the Stochastic Oscillator when one considers what the Stochastic Oscillator measures. This momentum oscillator measures the level of the close relative to the high-low range over a given period of time, say 20 days. The Stochastic Oscillator is relatively high when the close is near the high end of its 20-day range and low when the Stochastic Oscillator is near the low end of this range.
 Let's compare the 20-day Fast Stochastic Oscillator with 20-day Price Channels. The Stochastic Oscillator will usually be above 80 when prices exceed the upper Price Channel. Similarly, the 20-day Fast Stochastic Oscillator will usually be below 20 when prices move below the lower Price Channel. There is a slight timing difference because Price Channel data ends with the prior period. Stochastic Oscillator data, on the other hand, ends with the current period. This means the Stochastic Oscillator includes the most recent price action, but Price Channels do not. Nevertheless, the two measure pretty much the same thing.
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 The Dow Industrials SPDR (DIA) chart shows 20-day Price Channels (pink) with the 20-day Fast Stochastic Oscillator. The red and green lines indicate when prices are overbought (near the upper channel line) and oversold (near the lower channel line), respectively. The prices move above and below the centerline as the Stochastic Oscillator moves above and below 50.
+**Learn More:** [[:technical_indicators:stochastic_oscillator_fast_slow_and_full|Stochastic Oscillator]]
 ===== Overbought/Oversold =====
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 {{:technical_indicators:price_channels:prch-8-shch.png|Price Channels - SharpCharts}}
-===== Suggested Scans =====
+===== Scanning for Price Channels =====
+StockCharts members can screen for stocks based on Price Channel values. Below are some example scans that can be used for Price Channels-based signals. Simply copy the scan text and paste it into the Scan Criteria box in the [[https://stockcharts.com/def/servlet/ScanUI|Advanced Scan Workbench]].
+Members can also set up alerts to notify them when a Price Channels-based signal is triggered for a stock. Alerts use the same syntax as scans, so the sample scans below can be used as a starting point for setting up alerts as well. Simply copy the scan text and paste it into the Alert Criteria box in the [[https://stockcharts.com/h-al/al|Technical Alert Workbench]].
 ==== Oversold Bounce in Larger Uptrend ====
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 </code>
-For more details on the syntax to use for Price Channel scans, please see our [[docs>scans:indicators#price_channels|Scanning Indicator Reference]] in the Support Center.
+For more details on the syntax to use for Price Channel scans, please see our [[https://support.stockcharts.com/doku.php?id=scans:indicators#price_channels|Scanning Indicator Reference]] in the Support Center.
+===== Additional Resources =====
-===== Further Study =====
+==== Recommended Books ====
 Even though Price Channels are not used specifically in Thomas Carr's //Trend Trading for a Living//, the book shows traders how to trade in the direction of the underlying trend. Carr also shows readers how to configure a bullish and bearish watch list from which to set your entry and exit prices.
@@ Line 106: / Line 113: @@
 |  **Trend Trading for a Living**\\ Thomas Carr  |  **Trend Following**\\ Michael Covel  |
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