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Donchian Channels

What are Donchian Channels?​

Donchian Channels are a trend-following indicator created by Richard Donchian. They plot the highest high and lowest low over a selected period, forming an upper and lower boundary around price.

Donchian Channels help traders identify breakouts, trend strength, volatility ranges, and potential support/resistance zones.

The middle band (optional) is the average of the upper and lower channels.

How to Add Donchian Channels?​

  1. Click on the "+" button in the Indicators section.
  2. Select Donchian Channels.
  3. Choose the data source containing OHLC values.
  4. Configure the Length, Time Frame, and Offset.
  5. Click "Add" to save the indicator.

Configurable Parameters in Donchian Channels​

1. On Data (Source Selection)​

  • Donchian Channels require High and Low values.
  • If multiple candle datasets exist, select the desired OHLC source.
  • If no source is chosen, the indicator defaults to the main Candle Data.

2. Time Frame​

  • Sets the candle timeframe used for Donchian calculations.
  • Example: If set to 15, channels are based on 15-minute candles.

3. Length​

  • Determines how many periods Donchian Channels use to find the highest high and lowest low.
  • A common default is 20 periods.

When Length is Set Very Low (e.g., 2)​

Using universal, simple language:

  • A smaller length means Donchian Channels react very quickly.
  • With length 2, the indicator is basically checking: “What are the highest and lowest points in just the last two candles?”
  • This creates very tight channels, producing many breakout signals.
  • The indicator becomes ultra-sensitive and may generate false breakouts.

In short: short length = tighter channels, more signals, more noise.

4. Offset​

  • Moves the Donchian lines forward or backward for visual alignment.

Offset Guide:

  • Positive Offset → shifts channels forward
  • Negative Offset → shifts channels backward

Applying Donchian Channels on Other Candle Types​

Donchian Channels can be applied to any dataset with High and Low values.

Example

Apply Donchian Channels on Heikin-Ashi or Renko-derived candles to detect breakouts in smoothed or transformed price series.

Element Name​

Each Donchian Channels indicator receives a unique Element Name, making it easy to reference inside strategy rules.

Use Cases for Donchian Channels​

  • Breakout Trading
    → Price closing above the upper band signals bullish breakouts; below the lower band signals bearish breakouts.

  • Trend Following
    → Sustained price movement near the upper or lower bands reflects strong trends.

  • Volatility Measurement
    → Wide channels indicate high volatility; tight channels indicate consolidation.

  • Support/Resistance Zones
    → Upper and lower bands often act as dynamic barriers.

Next Steps​

✅ Add Donchian Channels to your strategy
✅ Use Donchian breakouts for trend and momentum entries
✅ Combine Donchian Channels with ATR, Supertrend, or Volume filters
✅ Use Donchian channel conditions in Conditions & Actions