Donchian channel MT4 indicator

Donchian channel MT4 indicator is originally designed by Richard Donchian. The indicator can capture the price movement and the price trend decently. The highest high, the lowest low and their mean value is calculated which indicates the current support and resistance levels.

tag: Donchian

Platform: Metatrader 4

Download link: At the end of the post.

Table of contents

Introduction

The indicator consists of mainly two bands – an upper resistance band and a lower support band.

The upper band is calculated as the highest high price for the selected ‘n’ period.
The lower band is calculated as the lowest low price for the selected ‘n’ period.
There is also a middle band which is the average of the two bands.

Screenshot

Input settings

There is only one parameter to set manually, the number of previous trading sessions, or bars, which has a default value of 20.

How to use

Donchian channel indicator can be used for identifying market volatility.

When there are high volatility and heavy price fluctuations, Donchian channels are wider
When there is lower volatility and prices are relatively flat, Donchian channels are narrower.

Trading buy/sell signal

Bullish Signals

Traders go long when price crosses the upper Donchian Channel
If the stock rises above the middle band of the Donchian channels, traders go long.
During a clear uptrend, when the price pulls back to the lower band, traders go long.

Bearish Signals

Traders go short when price crosses the lower Donchian Channel.
If the stock falls below the middle band of the Donchian channels, traders go short.
During a clear downtrend, when the price rises to the upper band, traders go short.

Download Donchian channel MT4 indicator for free

Download Here

How To Install Custom MT4 Indicators On Mt4 (6 Simple Steps)

Step 1: Download The Indicator To Your Computer

Step 2: Go To Your Mt4 Trading Platform And Click “Open Data Folder”

Step 3: Click open the “MQL4” folder

Step 4: Click Open the “Indicators” Folder

Step 5: Paste The Custom MT4 Indicator Into The “Indicators” Folder

Step 6: Close Your MT4 Trading Platform And Then Restart It

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