Donchian Channel
Plots the highest high and lowest low over a chosen lookback.
Start with the input, not the story.
Recent price extremes and channel width.
The local series exactly calculates the highest and lowest closes from the previous ten bars and leaves out the current one. That keeps the boundary honest. A full Donchian study should use highs and lows with the lookback you intend to trade.
Choppy markets can break one recent extreme after another and quickly reverse. Study entry and exit lookbacks separately.How traders commonly use Donchian Channel
The channel provides objective breakout levels and can also supply a separate trailing-exit lookback.
Mark the highest high and lowest low of a fixed completed-bar lookback.
Keep this job separate from entry timing, stop placement and position size.
A useful counterexample
In a choppy regime, price can repeatedly exceed a recent extreme and return inside, producing many failed break observations.
Donchian for structure, ATR for scale, risk sizing for exposure
Each part has a different job. If two tools answer the same question, remove one and compare the result.
Defines the pre-existing breakout and exit levels.
Measures channel width and volatility at the break.
Keeps exposure consistent across different stop distances.
Follow the same order every time
- Choose entry and exit lookbacks before replaying the chart.
- Build each channel level from candles completed before the decision candle.
- Distinguish an intrabar touch from a completed close beyond the channel.
- Measure channel width and invalidation distance in ATR units.
- Record next-candle execution and costs rather than assuming the boundary price was available.
The indicator is one part of the method
These strategy pages show the market conditions, entry, stop and exit around the indicator.
Donchian breakout
A rules-first breakout framework based on new lookback extremes.
- ENTRY
- Enter at the next H4 open after a completed close above the prior 20-bar upper channel for a long or below the lower channel for a short.
- STOP
- Initial stop is 2.0 × ATR(20) from the actual fill. Size to risk 0.50% of equity, rounded down to 0.01 lot; never add to or widen the position.
- EXIT
- Exit at the next H4 open after a completed close through the opposite 10-bar channel. The initial 2 ATR stop remains active until that exit.
Turtle-style breakout
An educational adaptation of channel breakout and volatility sizing principles.
- ENTRY
- Enter one unit at the next daily open after the qualifying channel close; there is no previous-winner skip rule.
- STOP
- Stop exactly 2N from actual fill. One unit risks 0.50% equity and is rounded down to 0.01 lot.
- EXIT
- Exit at next daily open after a completed close through the opposite 20-day channel; the 2N stop remains active.
Weekly swing breakout
Tests slow breakouts above or below pre-existing weekly structure.
- ENTRY
- Enter at Monday 00:00 UTC after the qualifying Friday close, provided the opening gap is no greater than 0.50 × weekly ATR.
- STOP
- Stop 0.25 × weekly ATR beyond the breakout candle's opposite extreme. Risk 0.35% equity and round down to 0.01 lot.
- EXIT
- Exit at the Monday open following the first weekly close through the most recent confirmed opposite-side swing; initial stop remains active.
Set up Donchian Channel on your platform
Match the lesson's period, price input, smoothing and candle timing. Similar names can still produce different values across feeds and platforms.
MT4
Custom code neededA faithful on-chart version needs an MQL4 implementation. Check the source note below when WickAtlas provides one.
MT5
Custom code neededA faithful on-chart version needs an MQL5 implementation. Check the download note below before assuming WickAtlas provides one.
TradingView
Built inAvailable in the standard TradingView indicator library. Names and default settings can differ.
“Built in” means the standard platform library contains the underlying indicator. It does not mean its defaults or calculation match every third-party version. Compare the platforms.
Plain-language formula
The same indicator can look slightly different across platforms because the price input, smoothing and rounding may change. Note your settings before comparing two charts.
Where it may help
Objective breakout rules and trailing exits.
Where it struggles
Choppy, directionless regimes with frequent failed extremes.
What to pair it with
Pair it with something that answers a different question, such as volatility or market direction. Try the indicator on its own before adding more tools.
The shortcut to avoid
Changing the lookback after every losing sequence.
Try this on a chart
Evaluate entry and exit lookbacks separately and include next-bar execution.
Use the version made for your platform
The MT4, MT5 and TradingView files are separate source implementations—not renamed copies. Read the code, compile or add it on the intended platform, and compare its output with the lesson before relying on it in practice.
Read platform notes, permissions and checksums →