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Channel III represents the market's tendency to trade within a price band.
The extremes are defined as:
Upper band: a 3 day moving average of the median (middle) high of the last five days.
Lower band: a 3 day moving average of the median (middle) low of the last five days.
Parameters
This study draws "Channel" lines above and below the price action.
A pair of independently computed lines are drawn. The calculation for each line is identical except for the price selector.
For each bar, the median price over X bars is calculated (the middle value among that bar's price and the preceding X-1 non-gap prices; if X is even, take the average of the two middle prices). Then perform an N-bar moving average calculation on the median-price series. The output series can optionally be delayed (offset) by a specified number of bars.
The study command for Channel 3 is .TDCH3.