Donchian Channel

Donchian Channel

Donchian Channels were created by Richard Donchian and were used to generate buy and sell signals for the Turtle Trading system. It is a simple trend following breakout system and works well in trending markets. The signals derived from the Price Channel are based on the following basic rules:

  • When price closes above the Donchian Channel, buy long and cover short positions.
  • When price closes below the Donchian Channel, sell short and liquidate long positions.

Donchian Channel

Note: The Donchian Channel indicator is not meant to catch tops or bottoms, only trends.