Donchian Channel: High-Low Bounds and Midpoint Calculation

Summary

This brief indicator description explains the Donchian channel, a technical tool built from the highest high and lowest low over a chosen lookback period. The upper band is the maximum high, the lower band is the minimum low, and the optional middle line is their average. Its inputs allow the user to select the period, decide whether the current bar is included in the calculation, and show or hide the midpoint.

The description specifies the channel’s basic construction but does not discuss trading rules, parameter selection, or performance evidence. Whether the current bar is included affects the values and should be considered when interpreting signals, particularly around breakouts. The text is an indicator reference, not a complete strategy or evaluation of how the channel performs across markets.

Key ideas

• The upper channel line is the highest high over the selected period.
• The lower channel line is the lowest low over the same period.
• The middle line is calculated as the average of the upper and lower boundaries.
• A setting controls whether the current bar contributes to the calculation.
• The description defines the indicator but offers no trading rules or performance evidence.

Tags

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