Constructing median-line channels from a pivot

What a price channel is meant to do

A price channel is a chart construction intended to contain prices throughout a trend. In the terms used here, it is a drawn envelope meant to contain prices for as long as the trend that produced it remains intact.

The three-point construction

Editorial framing: read the construction as a three-point recipe. Take an extreme high or low as the pivot, draw a median line that bisects the next corrective phase, and add parallels through that phase's high and low.

The median line is the center line drawn from that swing extreme so that it bisects the following corrective phase. The channel rails are the lines drawn parallel to the median line through the high and low of that same phase. Those parallels are the construction that defines the channel's support and resistance.

How channel drawings are grouped

Channel drawings are grouped into three basic constructions: parallel, rounded, and lines that join lows in a declining trend or highs in a rising trend.

Editorial reading: adding rails parallel to the median line places this drawing in the parallel group, rather than among rounded envelopes or lines that only join successive lows in a decline or successive highs in a rise.

Projections on a range-bar scale

On a range-bar chart the horizontal axis is not a fixed clock, so future reaction projections can be read without a known calendar time. The range-bar scale therefore lets projected reaction levels be seen before their clock time is known.

The actual time of a cycle projection becomes observable only as that time-cycle target is approached. A price objective arriving together with a time-cycle objective is treated as confirmation that one market cycle is ending and another is starting. That joint arrival is cycle coincidence: the reading that a price objective and a time-cycle objective arriving together marks the end of one cycle and the start of the next.