
Trading with Donchian Channels
The Donchian channels, also referred to as Donchian Bands, is one of the famous channel indicators besides the more popular Bollinger Bands. It is a trend following channel indicator and has given rise to many different trading strategies including the famed 'Turtle Trading Strategy' as well.
The Donchian Band is primarily used to gauge the volatility of the markets (similar to Bollinger Bands) and can also be used as a break out indicator as well as a horizontal support and resistance indicator. This means that when prices are stable, the Donchian channels tend to contract or narrow and when volatility picks up, the Donchian channels widen.
The Donchian Channel was developed by Richard Donchian a futures and commodities trader. Richard Donchian is also known within the trading f