Donchian Channel

Strategy based on Donchian Channel

Testing indicates an average annual return of about 52%. It performs best in the crypto market.

Donchian Channel Breakout trades new highs and lows based on the channel range. A close beyond the upper band signals strength, while a drop below the lower band invites shorts. Exits occur when price returns to the midpoint.

The channel is calculated from the highest high and lowest low over a lookback window. When price pierces these bounds, the system expects volatility expansion and positions accordingly.

Details

• Entry Criteria: Signals based on Price Action.
• Long/Short: Both directions.
• Exit Criteria: Opposite signal.
• Stops: No.
• Default Values:
  • ChannelPeriod = 20
  • CandleType = TimeSpan.FromMinutes(5)
• Filters:
  • Category: Trend
  • Direction: Both
  • Indicators: Price Action
  • Stops: No
  • Complexity: Basic
  • Timeframe: Intraday (5m)
  • Seasonality: No
  • Neural Networks: No
  • Divergence: No
  • Risk Level: Medium