Donchian Channels can be useful in visualizing the volatility of a market's price action. If the price is stable, the Donchian Channel will be relatively narrow. If the price has large fluctuations, the Donchian Channel will be wider.
Using the 20 day default period, a move above the channel signals a new 20 day high. Similarly, using a 20 week period, a move above the channel would signal a new 20 week high. Markets that continuously touch or exceed the upper channel line show strength, while conversely markets that continuously touch or break below the lower channel line show weakness.
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6 thoughts on “Have You Tried Using Donchian Channels?”
Do you provide this indicator for ASX (Australia Market Data) and is this indicator for swing and/or daytrade only? Thanks
Yes, we provide the indicator for the ASX and all time frames on our charting. You could certainly apply it to the minute charts that we offer.
Nice, i never used it, surely I will try it
Donkey channels were used by the Tortoise traders to both enter and exit. They do seem to present a compelling context of any market. Varying the periodicity and (offsets if any) one can get a good handle on over all direction and turning points:
How can we obtain this indicator?
We offer it as a tool on our MarketClub charting. Become a member and you have access to it.
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