 |
 |
 |
The Donchian Channel is a very simple trend-following indicator developed by Richard Donchian. It plots the highest high and lowest low over the last n-periods time intervals.
Interpretation
When the market is trending, signals can be derived from the Donchian Channel indicator based on the following basic rules:
1. When price closes above the Donchian Channel, buy long and cover short positions.
2. When price closes below the Donchian Channel, sell short and liquidate long positions.
The materials presented on this website are solely for informational purposes and are not intended as investment or trading advice. Suggested reading materials are created by outside parties and do not necessarily reflect the opinions or representations of Capital Market Services LLC. Please refer to our risk disclosure page for more information.
© 2011 Capital Market Services, LLC. All rights reserved.