A Donchian Channel Zigzag for Trend Crosses and Swing Levels

Summary

This experimental indicator creates a zigzag-like line that moves toward the upper or lower boundary of a Donchian channel. The channel uses the selected source and lookback length; the line’s direction changes when it crosses a channel boundary. Its bounce-speed setting controls how quickly it converges toward an extreme, while the lookback length controls how often directional changes occur. Dashed extensions project prior turns, and the channel fill can use a gradient based on the source’s position within the range.

The document suggests that, at the default bounce speed, crosses between price and the line may serve as potential entries and could help hold a trend through retracements. Faster settings are described as more predictive, with prior turning points offering hypothetical support and resistance references. The author cautions that these uses are uncertain and that the indicator may not suit crossover trading. No backtest or quantified performance evidence is presented, so the proposed uses should be treated as exploratory.

Key ideas

• The indicator moves a zigzag-like line toward the boundaries of a Donchian channel and changes direction at channel crosses.
• A longer channel lookback produces fewer direction changes, while higher bounce speed makes the line converge faster toward channel extremes.
• Price crosses of the line may be explored as trend entries, but the document does not establish their effectiveness.
• Prior zigzag peaks and troughs can be used as tentative support and resistance references.
• The indicator is experimental and is presented without backtest evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.