What Donchian Channels shows
The highest high and lowest low of the last N candles.
Indicator guide · Bands and channels
Donchian Channels: what it shows, settings and how to read it.
The highest high and lowest low of the last N candles.
How it is calculated
The upper line is the highest high of the last N candles, the lower line is the lowest low, and the middle line is halfway between them.
Usual settings
20 for entries. The Turtle traders used 20 for entries and 10 for exits, and 55 for a slower system.
How traders read it
A close above the upper line is a breakout to a new high: the core of the famous Turtle trading rules.
Where it fails
Many breakouts pull straight back; traders usually pair it with a stop below the middle line.
What to combine it with
ATR to size the stop, and a long moving average so breakouts are only taken with the trend.
Try Donchian Channels on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Donchian Channels. Click its name on the chart to change the settings. It is free for every member.
More in "Bands and channels": Bollinger Bands · Keltner Channels · Ichimoku · All 25 indicators
Questions
Frequently asked questions
What is the Donchian Channels indicator?
The highest high and lowest low of the last N candles.
What are the best settings for Donchian Channels?
The usual settings are: 20 for entries. The Turtle traders used 20 for entries and 10 for exits, and 55 for a slower system. No setting is best in every market, so test a change on past data before relying on it.
Is Donchian Channels reliable on its own?
No single indicator is. Many breakouts pull straight back; traders usually pair it with a stop below the middle line. Most traders use it together with: ATR to size the stop, and a long moving average so breakouts are only taken with the trend.
How do I add Donchian Channels to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Donchian Channels. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns