Donchian's 4 Week Rule Trend Trading Strategy 💡

[ukspreadbetting]

👉 It seems a lot of our viewers are non-subscribers. Make sure to subscribe to our youtube channel as we upload regular videos! If you hit the “Bell” icon (🔔) you will receive a notification on youtube every time that we upload a video on our channel. Bell icon hitters are super fans of our channel 🥰

[jamesrowh]

Great video. Cheers!

Donchian's work was one of the inspirations for the original Turtles. Trading the 20-day high (low) is a key part of that strategy.

I use this (and the 55-day variation) when markets are lower in volatility, and have a better than 50% success rate. The keys to maximizing probability are 1) enter on a bullish candle, 2) take only if higher timeframe confirms trend, and 3) be both tight and disciplined with your trailing stops (I use 2ATR).

[MrNintoku]

On a strong trending stock I've been back testing using Donchian with RSI and 200 Day EMA

I buy on the next period when the upper channel is penetrated by a new high and only sell when the stock is considered no longer oversold by the RSI.
If the stock is trending downwards I'll buy after the stock penetrates the lower channel and then sell when it closes above the middle channel.

I'll use the 200 Day EMA to verify that I am in either a uptrend or down trend.

I've tested it against a very strong performing IPO in 2020 on the ASX (De Grey Mining) and would have done very well had I been into stock trading at the time. I am also testing it on other long term trending stocks like Microsoft.

[absoluttchamp]

I suggest using this purely as a momentum filter. Your assumption is that all pullbacks after a 20 MA high will exceed the previous high and so on. Just like a a new LL is not a trend change itself neither is this tool, it just shows you weakness. You can work with two basic setups here in an uptrend. Pullback to mid, and pullback to the low (bullish setups) That is a possible framework to work on

[limitlesstradehub]

you upload many videos but i like them and i think if one just watch them carefully then will be able to learn many things about forex

[kevtherev]

The 1970s long long long time BEFORE...internet trading! Any old system won't work in the new environment.

[randominthemakin]

Why din´t you back test the strategy that you are presenting?

[NB-fcrl]

This strategy doesn't work anymore ... yes you can find (in hindsight) the occasional instrument where it is profitable, but the vast majority it is a losing strategy due to the number of failed breakouts before one that works, which is unable to recoup loses. I don't recommend this to anyone. On the plus side, you are likely to remain somewhere around breakeven trading this as it does win sometimes, but its a waste of your time.