Trends/Trendlines and channels

Parallel channel from pivots

A line through two swing lows, then a copy of it moved up until it rests on the highest swing high in between.

Trendlines and channelsBest on 3M, 6M, 1YAlso called pivot channel

Illustration of the parallel channel from pivots shape. It is a sketch, not real price data.

What it shows

This tool starts with a trendline through two swing points on one side, then adds a parallel line through the most extreme swing point on the other side. It is the way many people draw channels by hand.

Our code does the same step by step, so you can see which points anchored the first line and which point set the offset.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Pick two swing lows (or two swing highs) that make the best line.
Find the swing point on the opposite side that sits farthest from that line.
Draw a parallel line through that point.
Count later touches on both lines.

Starting values: Tolerance 1.0% of price; Minimum touches 2 on the base line, 1 on the copy; Minimum length 20 bars. These are proposed and will be tuned on real price data before launch.

How to read it

Teal dots anchored the main line.
The red dots show where the copy touches highs.
If later bars touch the copy, the channel is confirmed by more than the anchor point.

Status labels you may see

Label	What it means
Inside	The last close is between the lines.
Near the upper line	Within 2% of the upper line.
Near the lower line	Within 2% of the lower line.
Closed outside	Past either line.

What cancels it

A close beyond either line.

What traders check next

Whether later highs touched the copy line.
Whether price closed outside more than once.
Whether a different pair of lows gives a very different channel.

Limits

The copy line is drawn through one point, so it needs later touches to mean much.
The choice of anchor pair changes the result.
Steeper channels tend to fail sooner.

Try it in forecastviz

Open any ticker and choose Trendlines and channels → Parallel channel from pivots in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Ascending channel and Descending channel on the same chart.

Open on a ticker

Questions

Why not just use the regression channel?

The regression channel is a statistical fit. This one is anchored on specific swing points you can see.

Which side is used as the base?

Whichever side has the better line. It can be the lows or the highs.