What is the goal of the channel normalization operator?

The channel normalization operator's primary goal is to filter out long-term trends to allow traders and analysts to focus more clearly on short-term price movements. By removing the influence of longer-term trends, participants can better identify immediate fluctuations and shifts in price action that might signal opportunities for trading. This is particularly useful for short-term trading strategies where timing and precision are critical.

For instance, when analyzing a price chart, employing channel normalization can help highlight minor price changes that would otherwise be overshadowed by a prevailing long-term trend. This allows traders to make more informed decisions based on the current market dynamics rather than being influenced by historical price trends.

In contrast, identifying long-term price trends would focus on broader market behavior over significant timeframes, while providing signals for trade entry and exit is more associated with trading signals derived from various indicators. Analyzing volatility intersects with understanding how price fluctuates but does not directly address the normalization process that aims to isolate short-term price action.