Donchian Channel Activator with an Average True Range Buffer

Summary

This indicator adapts a Donchian channel by placing its upper and lower levels beyond recent highs and lows using a multiple of average true range. The code uses a lookback period and offset to calculate the channel reference points, then tracks a directional state. A close crossing beyond the relevant recent high or low changes that state, and the returned line switches between the buffered channel levels. The output is colored according to direction.

The description positions the indicator as a trend-reversal activator: a channel break triggers a change in directional state. The example includes parameter defaults, but offers no entry or exit plan beyond that state change, and no testing, markets, timeframes, or results. Users would need to assess sensitivity to lookback and buffer settings, as well as false breaks and lag, before using it in a trading system. The page’s remaining text is privacy boilerplate.

Key ideas

• The indicator extends Donchian highs and lows by a multiple of recent average true range.
• A close crossing beyond a recent channel reference changes the tracked directional state.
• The plotted line switches between buffered channel levels and is colored by direction.
• The example provides parameter defaults but no tested trading rules or performance results.
• Lookback and buffer choices may affect lag and sensitivity to false breaks.

Tags

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