As simple as it gets, channels based om high, low and ATR distances, Shows possible short term support / resistance or can be used as tp/sl in some trading systems
Recommendations:

in this form it is not meant to be used signals
instead it should be used for trends, support, resistance estimation, or, as told above, for TP or SL settings
This is the indicator originally posted here Limit channels that is extended with a display of "states".

"states" are displayed as colored histogram
they can be calculated using :
level 3 - outer levels - the "slowest"
level 2 - middle levels
level 1 - the inner levels - the "fastest"

Recommendations:
This is just a suggestion how the levels of this kind can be used
A lot more combinations from 6 levels can be added but that is left to the discretion of anybody using the levels indicator
You can use color changes as possible "signals"