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Donchian channel - extended - indicator for MetaTrader 5
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- 15221
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- Published:
- 2019.01.25 11:04
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Theory :
The Donchian channel is an indicator used in market trading developed by Richard Donchian. It is formed by taking the highest high and the lowest low of the last n periods. The area between the high and the low is the channel for the period chosen.Donchian Channel Formula
- The upper band is calculated as the highest high for the selected period.
- The lower band is calculated as the lowest low for the selected period.
- The selected period does not include the day on which the band is plotted (otherwise the band would never be crossed). For example, the 20-Day Donchian Channels for today are the highest high and lowest low for the preceding 20 trading days.
This version is not calculating only the channel itself, but is calculation a sort of support and resistance "sub"channels" within the existing Donchian channel. That way we can estimate the "price action" a bit more accurate
Usage :
It can be used as any "regular" Donchian channel, but also can be used for support and resistance levels assessment
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