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Miha Kralj d493bfd42f Refactor documentation for various filters and indicators to enhance clarity and consistency

- Updated Bessel, Bilateral, Blma, Butter, Conv, Ema, Kama, LSMA, MAMA, MGDI, SSF, USF, ATR, ADL, and ADOSC documentation to use bullet points for key concepts and features.
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PCHANNEL: Price Channel

Overview and Purpose

The Price Channel is a simple volatility-based indicator that plots the highest high and the lowest low over a user-defined lookback period. It is very similar in concept and application to Donchian Channels. The channel visually represents the trading range of an asset over the specified period.

A middle line, typically the average of the upper and lower channel lines, can also be plotted to serve as a mean reference.

Core Concepts

Highest High: The upper band represents the highest price reached during the lookback period.
Lowest Low: The lower band represents the lowest price reached during thelookback period.
Trading Range: The channel effectively shows the price extremes for the chosen period.
Breakout Indication: Prices moving above the upper channel or below the lower channel can signal potential breakouts and the start of new trends.

Common Settings and Parameters

Parameter	Default	Function	When to Adjust
Length	20	Lookback period for determining the highest high and lowest low.	Shorter lengths make the channel more reactive to recent price action; longer lengths create a wider, smoother channel representing longer-term ranges.

Calculation and Mathematical Foundation

Simplified explanation:

For each bar, look back over the specified Length.
Identify the absolute highest high price during that period. This forms the Upper Channel line.
Identify the absolute lowest low price during that period. This forms the Lower Channel line.
(Optional) The Middle Channel line is the average of the Upper and Lower Channel lines: (Upper Channel + Lower Channel) / 2.

Technical formula:

Upper Channel: UpperChannel = Highest(High, Length)
Lower Channel: LowerChannel = Lowest(Low, Length)
Middle Channel (optional): MiddleChannel = (UpperChannel + LowerChannel) / 2

Interpretation Details

Support and Resistance: The upper band can act as resistance, and the lower band as support.
Breakouts:
- A close above the Upper Channel suggests bullish strength and a potential upside breakout.
- A close below the Lower Channel suggests bearish pressure and a potential downside breakout.
Trend Identification:
- In an uptrend, prices may consistently touch or "ride" the Upper Channel.
- In a downtrend, prices may consistently touch or "ride" the Lower Channel.
Volatility: The width of the channel can give an indication of volatility. Wider channels suggest higher volatility over the lookback period.
"Turtle Trading" Strategy: Price Channels (like Donchian Channels) were famously used in the "Turtle Trading" system, where breakouts from the channel were used as entry signals.

Limitations and Considerations

Lag: Like all indicators based on lookback periods, there's an inherent lag. The channel reflects past price action.
Whipsaws: In choppy, non-trending markets, breakouts can be false, leading to whipsaws.
Parameter Choice: The Length parameter is crucial. A length too short may generate many false signals, while one too long may miss timely entries.
Not a Standalone System: Best used in conjunction with other indicators (e.g., volume, trend indicators) or price action analysis for confirmation.

References

Donchian, R. D. (Various). (Conceptual basis for channel breakouts).
Faith, C. (2007). Way of the Turtle. McGraw-Hill. (Describes trading systems using similar channels).

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