The Donchian Channels indicator is a technical analysis indicator devised by Richard Donchian, a futures trader, during the mid twentieth century. Donchian Channels with clouds as shown in the picture below is an excellent way of identifying price breakouts that show forms of support and resistance levels, this type of indicator is very useful when used with other technical indicators. It also allows you to select any timeframe which will show the breakout levels on the same chart, so you can show the daily Donchian Channels on a 1-hour chart, this makes it a powerful tool.
The standard version of this tool is included in the cTrader trading platform does not allow you to set a custom timeframe that is different from your chart timeframe, and also does not show the cloud bands. At the time we published this indicator there was no other Donchian Channel indicator available that shows the cloud bands.
Indicator Settings
When you attach the indicator to a chart you will see the indicator settings which allow you to configure it.
Shift - this allows you to shift (move) the indicator left or right of the current candle.
Period - set the indicators period, default is 20.
Timeframe - option to set any timeframe to show the levels on the current chart.
The Donchian Channel works together very well with other moving average indicators for the perfect crossover strategy and with the Donchian middle line, it is possible to form the short-term average. You can also use a 20-day Donchian channel together with a 5 or 10-day channel to exit a position.
Warning
Do not use this indicator on its own to spot a breakout, use this indicator to help you visualise what is happening in the markets, it is best to use them as confirmation signals for your existing trading strategy.
How To Install & Open
First, make sure you have the cTrader trading platform installed and then simply unzip the file and double-click on it to automatically install it onto the platform.
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