Tang Qian Channel - MetaTrader 5 Script - MQL5 #402 | Forex Indicator Download - MT4/MT5 Resources

Richard Donchian

Richard Donchian is a legend in the trading world. He is often called the founder of trend following systems. The famous Turtle trading system is based on his work. Donchian achieved great success at an advanced age. Despite this, he continued to work and proved by his own example that he was a successful trader and that no one was unsuitable for trading.

Donchian Channel is a volatility indicator that calculates the current price range based on the recent highest and lowest prices. All you need to do to calculate a channel is find the highest maximum and lowest minimum over a certain period.

Richard Donchian himself suggested using cycle 20 to build the channel. Back then, trading was typically done on the daily chart, and 20 was exactly the average number of days in the month. Nonetheless, period 20 is also quite convenient for creating Donchian channels on smaller time frames. The results of building channels using periods of 18, 24, etc. are also very interesting. "Turtle" uses period 55 (for market entry).

Most trading systems using Donchian Channels are breakouts, they only have a small percentage of profitable trades, which must be enough to cover the losses from a large number of wrong entries.

Channel center lines (in addition to upper and lower border lines) are also added to this version of the indicator.

Attachment download

📎 donchian_channels.mq5 (10.41 KB)

Source: MQL5 #402