Donchian Support and Resistance Slopes with ATR-Based Candle Grading

Summary

This script builds a Donchian channel from rolling highs and lows, then describes sloped support and resistance lines that update when those extremes are renewed. The upper and lower slopes are intended to serve as resistance and support, with candle closes crossing a slope used as a trading signal. ATR bands also provide a volatility-scaled measure of candle size, which the script uses to color larger candles differently. The visible code sets a channel lookback and ATR settings, along with strategy assumptions such as commission and slippage.

The supplied document is truncated before the slope calculations and order logic are fully shown, so the precise entry, exit, and risk rules cannot be verified from the text provided. It presents a strategy script rather than a written evaluation, and includes no backtest results or market-specific evidence. Donchian breakouts and slope crossings can lag or whipsaw, while candle grading is a chart annotation rather than demonstrated confirmation. Further assessment would require the complete script and testing with realistic costs.

Key ideas

• The Donchian channel uses rolling highs and lows to define a price range.
• Updated extremes are intended to anchor sloped support and resistance lines.
• The described signal is a candle close crossing one of the slopes.
• ATR-based bands are used to grade candle size and color larger bars.
• The source is truncated before its complete trading and risk rules, and provides no performance results.

Tags

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