Description:
Donchian Channels are a technical indicator developed by Richard Donchian, a renowned futures trader and pioneer in trend following. Comprised of three bands – upper, lower, and median – Donchian Channels help traders identify trends and potential breakout or reversal points in the market.
Input Parameters:
- Length: Number of periods used in the calculation.
- Offset: The offset value is used to access the data of any candle or indicator concerning the current candle, to access the current candle data it will use the offset value of "0", to access previous candle data "-1" offset value will be used, access data of previous to previous "-2" will be used.
Use Cases:
- Trend Identification: When the price of a security is consistently above the median band, it indicates an uptrend. Conversely, when the price is consistently below the median band, it signals a downtrend.
- Breakout and Reversal Signals: When the price breaks above the upper band, it can indicate a potential breakout to the upside, suggesting a possible long position. Similarly, when the price breaks below the lower band, it can signal a potential breakout to the downside, implying a potential short position.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Dynamic Alerts
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 10, 2024