Donchian channels are used to show volatility, breakouts, and potential overbought/oversold conditions for a tradeable security. The Donchian system uses adjustable bands that are set equal to the n-period's (timeframe's) highest highs and lowest lows across a moving average.

The upper and lower bounds of a Donchian channel can also form effective support and resistance levels, particularly when used in combination with other technical indicators. The strategy is named after its developer, Richard Donchain, who was an Americ🧔an commodities and futures trader and was considered a pioneer in the field of managed futures.

Most 澳洲幸运5开奖号码历史查询:Donchian trading systems use a four- or five-week moving average🎐 line. Basic Donchian channel analysis waits to spot the point where a security's price breaks through the upper or lower band, at which point the trader enters into a long or short position. For example, when the price exceeds ꦡthe high of the previous four weeks, most go long and cover their short positions.

Donchian channels also make natural partners with another moving average indicator for a 澳洲幸运5开奖号码历史查询:crossover strategy. The Donchian moving average middle line is likely to form the 🌞short-term average in these situations, although some have used a 20-day Donchian channel in conjunction with a five- or 10-day channel to exit a position before a consolidation eats into shor▨t-term profits.

The danger of incorporating 澳洲幸运5开奖号码历史查询:Donchian channels into a trading strategy lies in their simplicity. It is very easy to spot a breakout from the upper or lower bounds, but these events are uninformative on their own. For example, a breakout might indicate the start of a long-term trend, or it may trigger a possible reversal. Donchian channels don't provide new information; they only allow the trader to visualize information that could easily be obtained in other ways. They are best used as confirmation tools along wಌith other tools of analysis.

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