The Donchian Channel Breakout is a strategy made famous by the Turtle Traders, who made their millions trading commodities in the 1980s.
In this tutorial we’ll look at how the Donchian Channel Breakout works, how to build the strategy and test its effectiveness, and how to use the Market Analyser to find signals on a daily basis.
Click here to download the PDF.
Donchian Channel Overview
A Donchian Channel is created by determining the highest and lowest point in the last X number of days. The highest point during the last X number of days marks the top of the channel and the lowest point marks the bottom of the channel. A long entry signal is given when the price breaks out to the upside and a short entry signal is given when a price breaks to the downside.