Donchian Channels

What are Donchian Channels?

Donchian Channels plot the highest high and lowest low over a period (typically 20 days). They identify breakouts when price exceeds the channel.

Parameters (20, 20)

• Upper Band: 20-period highest high
• Middle Band: (Upper + Lower) / 2
• Lower Band: 20-period lowest low

Interpretation

• Bullish: Price breaks above upper band
• Bearish: Price breaks below lower band
• Range: Price between bands

Trading Signals

• Buy: New 20-day high (upper breakout)
• Sell: New 20-day low (lower breakout)
• Channel width = volatility

Close Price Overlay

Close above upper channel = bullish breakout. Toggle the price overlay via the chart icon in the app bar.