The idea
Buy a close above the previous 20-candle high; exit below the 10-candle low. The idea behind the Turtle traders: most breakouts fail, but the few that run pay for the rest.
Strategy guide · Breakout · long
Donchian 20 Breakout strategy: exact rules, strengths and weaknesses.
Buy a close above the previous 20-candle high; exit below the 10-candle low. The idea behind the Turtle traders: most breakouts fail, but the few that run pay for the rest.
Entry rule
Buy when price closes above the highest high of the previous 20 candles.
Exit rule
Sell when price closes below the lowest low of the previous 10 candles.
Where it works
Markets that break out and keep going. This is the core of the well-known Turtle trading rules.
Where it fails
Ranges, where most breakouts fall straight back. Expect many small losses between the large wins.
The common mistake
Skipping a signal after a few losses. The few big trends pay for everything, and they cannot be picked in advance.
Backtest it yourself
Sign in, open Genni Strategies and pick "Donchian 20 Breakout" from the leaderboard, or build it with the rule builder. Choose a coin and timeframe and press "Run backtest" to see every trade on up to 1,000 real candles, fees included. "Start paper trading" then follows it live without money.
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Questions
Frequently asked questions
What are the rules of the Donchian 20 Breakout strategy?
Entry: Buy when price closes above the highest high of the previous 20 candles. Exit: Sell when price closes below the lowest low of the previous 10 candles.
Does the Donchian 20 Breakout strategy work?
The idea behind the Turtle traders: most breakouts fail, but the few that run pay for the rest. It tends to do well here: Markets that break out and keep going. This is the core of the well-known Turtle trading rules. It tends to lose here: Ranges, where most breakouts fall straight back. Expect many small losses between the large wins. Past results do not predict future results.
How can I backtest the Donchian 20 Breakout strategy for free?
Sign in, open Genni Strategies and pick "Donchian 20 Breakout" from the leaderboard, or build it with the rule builder. Choose a coin and timeframe and press "Run backtest" to see every trade on up to 1,000 real candles, fees included. "Start paper trading" then follows it live without money.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns