Let's draw the channel line
You can draw the channel line easily in the same way as the trend line. In case of the up trend, you have only to draw a parallel line with the trend so as to pass the recent highest point. This is just the channel line shown in below.
On the contrary, in case of the down trend, you have only to draw a parallel line with the trend so as to pass the recent lowest point. As shown in below, the solid line stands for the trend line and the dotted line for the channel line.
As you can see from these two charts as shown in above, it is very useful for the short term forex trading to make position around the trend line and to close the position for profit taking near the channel line. The longer this status keeps well, the stronger and the more stable the market trend is. It will keep the condition until the forex market faces the reversal point.