are used as part of a popular analysis and trading technique. In essence, there are 3 key elements to it: 2 outside parallel lines that provide and a in between them. To use a correctly, identify 3 points that are consecutive highs and lows, where the first point represents the start of a trend. The connects the first point to the midpoint of the other 2. Additional lines can be added at a set number of standard deviations from the median, forming parallel trend channels.
can be used to identify buying and selling opportunities at those lines (for trading bounces or breaks), depending on the specific rules of entry and exit a trader may have. Conservative traders will look for additional confirmation. Apart from there are variations like the Schiff , the and the Inside . TradingView has smart drawing tools for all of these techniques and there is a popular chat where users share pitchfork-based ideas.