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.
Platform: Metatrader 4
Download link: At the end of the post.
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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.
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
- 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.
- 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
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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