Final answer:
A channel in technical analysis must contain at least 80% of the price action between the trend lines to be considered a valid channel, which traders use to make decisions about trades.
Step-by-step explanation:
In the context of technical analysis in trading, a channel must contain at least 80% of the price action between the trend lines in order to be considered a valid channel. A channel is defined by drawing two parallel trend lines on a price chart, marking the support and resistance levels that the price has tested multiple times without breaking out. Within these boundaries, the price of a security moves in a somewhat predictable pattern. Traders often use channels to make decisions about entry and exit points. If the price action does not stay within these parallel lines at least 80% of the time, the stability and predictability of the channel are called into question, making it less reliable for trading purposes.