Min-Max Channel tracks the two extremes of the recent past. The upper line is the highest value of the high source over the last Period bars, and the lower line is the lowest value of the low source over the same bars. The space between them is shaded.
The channel answers from the very first bar. Until Period bars exist it uses every bar so far, so the early lines are the running high and low of the chart rather than a blank warmup. After that each line is the extreme of a fixed window, so it steps down or up as an old extreme drops out of the window and holds flat while no new extreme forms.
By default the edges are built from the bar highs and lows, and either can be switched to another source such as the close.
How to read Min-Max Channel (MMCHANNEL)
The upper line is the price that a move has to exceed to set a new Period high, and the lower line the price a move has to break to set a new Period low. A bar that pushes the upper line up is a fresh breakout, and a long flat stretch of both lines is a range.
The channel says nothing about direction by itself and it never leads price: an edge only moves when price makes a new extreme or an old one leaves the window. Use a longer period for the larger swing structure and a shorter one for tight breakouts.
Settings
- Period
- How many bars the window covers. A longer period gives a wider channel whose edges move less often.
- High Source
- The series whose highest value forms the upper edge. The bar high by default.
- Low Source
- The series whose lowest value forms the lower edge. The bar low by default.
Frequently asked questions
Why do the lines start on the first bar?
Until Period bars exist the channel uses every bar it has, so the first values are the running high and low of the chart so far rather than nothing.
How does it differ from Price Channel?
Price Channel uses the same windowed highest high and lowest low of the bar highs and lows and adds their midpoint. Min-Max Channel draws only the two edges, and lets either edge be built from another source such as the close.
Why would I change the sources?
Using the close for both edges gives a channel of closing extremes, which ignores intrabar spikes and is often used to confirm a breakout on a close.
