Donchian Channel
Highest-high / lowest-low channel — breakouts.
What it is
Highest-high / lowest-low channel — breakouts.
The Donchian channel, named for Richard Donchian, plots the highest high and lowest low over the last N bars as two horizontal envelopes around price. The midline is the average of the two. The 20-bar Donchian breakout was the entry rule for the original Turtle Trading system in the 1980s.
Reads: price closing above the upper channel = N-bar high breakout (long signal). Price closing below the lower channel = N-bar low (short signal). The channel itself acts as a trailing stop for breakout trades.
Unlike Bollinger Bands, Donchian channels do not use any statistical assumption — they are just the rolling max / min. They are the canonical implementation of a 'breakout above prior range' trading rule.
Upper = max(high, N) Lower = min(low, N) Mid = (Upper + Lower) / 2
Live chart
TradingView has no built-in study for this indicator, so there's no live chart to embed here. It's a structure / smart-money tool — the best way to see it is to run it inside a strategy and backtest it.
Parameters
| Parameter | Default | Range |
|---|---|---|
| Period | 20 | 2 – 500 |
Output fields
The named values this indicator exposes to your entry and exit rules.
Learn more on the blog
Deep-dive articles explaining this indicator and how to trade it.
Donchian channels: the breakout indicator the Turtles got rich on
Two lines — the N-bar high and the N-bar low — and a rule to enter on breakouts. That's a Donchian channel. The system trained the most famous prop-trading class in history. Here is how it works and where it breaks.
How to backtest a Donchian breakout strategy on crypto
The channel breakout that powered the original Turtle traders is simple to state and easy to overfit. Here's how to backtest it honestly, from rules to walk-forward.
Backtest this indicator
Drop this indicator into a rule-set, run it over years of BTC/USDT data, and see whether the edge is real or just curve-fit — no credit card required.