A channel is built by drawing a trendline along the pullback points, then copying it to the opposite side so it touches the swings that ran furthest. Price then spends most of its time between the two lines.
The practical use is location rather than prediction. Buying near the lower rail of a rising channel is a better trade-location than buying at the upper rail, because the distance to your invalidation is smaller and the distance to the opposite rail is larger. The channel gives structure to a target.
Channels break constantly, and in a strong move price will ride the upper rail for a long time while traders repeatedly short it. A break out of the upper rail is as often an acceleration as an exhaustion. Treat the channel as a map of the recent range, not as a wall.
Related: trendline, donchian-channel, keltner-channel, trade-location, andrews-pitchfork