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Chartmill Channels

What are CM Channels?

A Chartmill Channel is a horizontal channel wherein  prices move sideways.  The top side (red) is called the Upper Chartmill Channel (UCC), whereas the bottom side  is called the Lower Chartmill Channel (LCC).

CM_Channels_Upper_Channel_Lower_Channel

 

This channel doesn’t – in contrary to the well known donchian channels – require extra parameters.  Chartmill channels automatically calculate the most optimal value by looking for an optimum between “as long as possible” and “as small as possible”.  In that way, channels can be more objectively defined.

When and how CM channels are best used?

CM Channels are primarily developed to detect break outs in sideways (accumulation) phases .  By maximizing length and minimizing height, Chartmill Channels are powerful stuff  to hunt for stocks which are building up lots of energy before breaking out of a long accumulation phase.

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