Technical
What is Donchian Channels?
The highest high and lowest low over the past N days, drawn as an envelope β the simplest channel there is, and the literal boundary of recent price action.
Formula
Upper = Highest High(N); Lower = Lowest Low(N); Middle = (Upper + Lower) Γ· 2
How to Interpret
The foundation of classic breakout systems (the Turtle strategy traded 20- and 55-day Donchian breaks): new channel highs are bought, new lows sold. Channel width doubles as a volatility read.
Typical Ranges
Pure breakout logic buys strength and sells weakness β devastating in trends, bleeds steadily in ranges through false breaks. No smoothing whatsoever.
Find Stocks Using This Signal
Screen US and Indian stocks by Donchian Channels in the Technical Screener.