Indicator - Donchian Channel
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Calculation Donchian Channel
The upper line of the Donchian channel shows the highest high of the last n periods.
The lower line shows the lowest low of the last n periods.
The middle line shows the average of the upper and lower line value.
Interpretation Donchian Channel
The Donchian channel allows you to easily see market volatility : if the channel is narrow, volatility is low. If the channel is wide, volatility is high.
A bullish signal is given when price closes above the donchian channel upper line.
A bearish signal is given if price closes below the donchian channel lower line.
