Donchian Channels
Definition of 'Donchian Channels'A moving average indicator developed by Richard Donchian. It plots the highest high and lowest low over the last period time intervals. |
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Investopedia explains 'Donchian Channels'The Donchian Channel is a simple trend-following breakout system. The signals derived from this system are based on the following basic rules:1. When price closes above the Donchian Channel, buy long and cover short positions. 2. When price closes below the Donchian Channel, sell short and liquidate long positions. |
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