Donchian Channel

Creator: Richard Donchian

Period: 20

As long as the price is higher than the price of the previous 20 periods, the upper band of the indicator will be rising. It is a bullish sign. The lower band will fall when the price is at the 20-period low, which is a bearish indication.

A middle band is calculated by averaging the highest high and the lowest low over a period of 20 periods.

The period of 20 can be changed by the user.

Click here to know more about Donchian Channel.

You can view a video on the history and usage of this indicator by clicking here.

The indicator can be found in the Indicator Digger section of TradePoint & RZone. There are ready conditions in tabular format that can be used to pick stocks based on the condition of this indicator on any charting technique.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.