Strategy combining Donchian Channels and RSI indicators. Buys on Donchian breakouts when RSI confirms trend is not overextended.
Donchian channels identify breakout levels, while RSI checks whether momentum supports the move. Positions follow when a breakout aligns with RSI direction.
Best for traders expecting a sustained breakout rather than a fakeout. Risk is limited through an ATR stop.
Entry Criteria:
Long: Close > DonchianHigh && RSI < RsiOversoldLevel
Short: Close < DonchianLow && RSI > RsiOverboughtLevel
[]Long/Short: Both
[]Exit Criteria:
Breakout failure or opposite signal
[]Stops: Percent-based using StopLossPercent
[]Default Values:
DonchianPeriod = 20
RsiPeriod = 14
RsiOverboughtLevel = 70m
RsiOversoldLevel = 30m
StopLossPercent = 2.0m
CandleType = TimeSpan.FromMinutes(5).TimeFrame()
[*]Filters:
Category: Breakout
Direction: Both
Indicators: Donchian Channel, RSI
Stops: Yes
Complexity: Intermediate
Timeframe: Mid-term
Seasonality: No
Neural Networks: No
Divergence: No
Risk Level: Medium