4 EXPLOSIVE Tips for Trading with the Donchian Channel

Use the Donchian Channel to time your entries, filter high-probability setups and ride massive trends.

First and foremost, what is a Donchian Channel? How do I get this indicator on my chart? If you're using TradingView just go down to the Indicator Tab, search for Donchian, and you click this one over here, and here's what you see on your chart, the Donchian Channel. It comes with the default 20-period setting.

Tips for Trading with Donchian Channel #1
The first tip is that you can use Donchian Channel to help you filter for high-probability trading setups. It can help you to trade with the trend. Here's how. Let's say you want to buy with the trend. What you'll do is pay attention to the middle band and where the price is relative to the middle band. If the price is below the middle band, then you look for short trading opportunities. Means you look to sell. If the price is above the middle band, then you look for long trading opportunities, meaning you look to buy. This is a simple filter that will keep you on the right side of the markets more often than not.

Tips for Trading with Donchian Channel #2
The second thing a Donchian Channel can do for you is to help you time your entries. What you can do is you can look to trade the breakdown or the breakup. Can see that over here this candle over here pretty much made a new 20-day low. You can look to short the market, as the price made a new 20-day low. Alternatively, this candle over here made a new 20-day high, so you can look to buy the market as the price makes a new 20-day high. This is only to serve as an entry trigger. This is not a strategy but just an entry trigger.

Tips for Trading with Donchian Channel #3
The third thing a Donchian Channel can do for you is to help you ride massive trends. Here's how it works. You can see, right? Let's say, for example, you are short this market, this crude-oil market. Let's say the market breaks this low over here, this 20-day low, you go short. Let's say your stop-loss; it's above this swing high, let's say you put it somewhere here, one ATR above it, somewhere here. You can trail your stop-loss using this middle band over here. This means if the price doesn't break above the middle band, you will stay short, you will hold onto your short position.

Tips for Trading with Donchian Channel #4
The fourth tip is that the Donchian Channel works very well with the Average-True-Range indicator. Let me pull out this ATR indicator. We'll use the default settings, as well. I don't have to be too fancy on this. I like to look at the weekly chart. The thing that I like to look for is to see low volatility in the markets. I want to see that the ATR value is at multiyear lows. This means that the ATR value over the last two or three years, this is the lowest level. This is what I'm looking for.

Thanks for watching!

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[snheteshparihar]

thanks a ton Rayner!! Must mention you have a very unique & awsome style of making videos on indicators!
what i like about all your indicator videos is that they are not superficial knowledge like others.
you start right from the basics of "what & why" of an indicator & go right up to "how to use" those indicators like a pro! this adds so much sense & value while using these indicators!
keep up the good again

[EnergyFabricator]

I've been binge watching your videos for the last 2 days. I'm think I know enough to do something stupid!
Thanks Rayner!! Great videos & I love the multiple examples. Invaluable information!

[futureisamazin]

Well done and well explained...
As a Professional Trader I use ATR and Donchn channel as well as other indicators...
I change to "evolve" with changing markets !

[orubbishx]

always nailed it by going straight to the points. thank you again rayner! best of luck in 2020 from brunei

[mrtravelhub]

"God is in the details" The turtle traders used Donchian channels (20 and 55) as entry metod.

[mehrdadmithra]

You have now 1.79 subscription for a reason. You are excelent . Big thanks, got a lot out from this video in 8 minutes.Please keep up this quality chanel.👍👍👍

[akam]

Thank you, donchian channel useful to detect false signal.

[agnt.geraldsinclairnsa]

Maestro, muchas gracias. The most excellent explanation. Thank you so much. I love your channel by the way.

[gkzcwlo]

Sike!!! Even tho you didn't make this video I believe you're strategy!!! I've been watching your video ever since it actually helps me a lot. Hope to be noticed! Good job and God Bless!!!

[michaelgrant]

Yet another useful tool. Thank you Rayner.

[irfaana.b.]

Thank you Rayner, after watching this for the 10th time. I'm ready to apply it right now >:D !

[fratoz]

Thank you very much for this video Rayner I appreciate :))) Can you share a video about Darvas Box also? kind regards

[emzkind]

Thank you very much. Shared and liked.

[hanre]

Hi Rayner. Is there an email I can reach you on. I have a few questions for you. Thank you for all the great info.

[shanu]

Very informative as always thanks❤🙏 Brother

[Ron-dmkv]

Hi Theo
Thanks for these 3 tips using DC
I'm wondering if this indicator is still relevant (5 years after this video) as the markets particularly the forex seem to be less and less in a trend structure?
Thanks in advance for your enlightments

[nzt]

Thanks Rayner! Can you explain me the difference between Bollinger Bands and Donchian Channel?

[amolfast]

Thanks brother, , , good info abt Donchain channel, , where from you?

[dannygreen]

Iv just learnt how to set this up the ribbon is great 👍

[timetravel_]

i'm not into swing trade, but if i ever start, i'll remember this video, thx