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.
Fórmula
Upper = max(high, N) Lower = min(low, N) Mid = (Upper + Lower) / 2
Ejemplo
20-bar high = 52,000, 20-bar low = 48,000. Mid = 50,000. Today closes at 52,100 — a 20-bar upside breakout.
Cómo Noon Barbari usa Donchian channel
Cada concepto aquí está implementado en la plataforma. Abre la documentación o la herramienta correspondiente para verlo en acción.
See the indicators reference →Términos relacionados
- Indicadores
Bollinger Bands
A moving average flanked by ±k standard deviations of price. k = 2 by default.
- Indicadores
Average true range (ATR)
Rolling average of the true range — the canonical volatility measure for stops.
- Estructura de mercado
Swing high
A local peak: a bar whose high is higher than the N bars on each side.
- Estructura de mercado
Break of structure (BOS)
Price closing through a prior swing point in the direction of the existing trend.