Description:
Donchian Channel Width is a technical indicator developed by Richard Donchian, is a technical indicator that measures the difference between the upper and lower bands of Donchian Channels, providing insights into market volatility and potential trend strength.
Input Parameters:
- Length: Number of periods used in the calculation.
Use Cases:
- 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.
- Channel Crawl Strategy: A trend-following strategy that involves waiting for the price to crawl along the upper or lower bands of the Donchian Channel before entering a trade. This strategy is based on the assumption that when the price crawls along the upper band, it indicates strong momentum to the upside, and when it crawls along the lower band, it indicates momentum to the downside.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 10, 2024