What are Donchian Channels
A Donchian Channel is a technical indicator that simply shows the highest and lowest prices reached over a period of historical candles. A 20-period Donchian Channel shows the highest high and lowest low of the last 20 candles.
The upper channel marks the highest price reached during the last 20 candles.
The lower channel marks the lowest price reached during the last 20 candles.
The Donchian-style breakout refers to price breaking above the upper channel, or below the lower channel, confirming a breakout and continuation of the trend.
Step 0: Access the Strategy Concept Template [1 Min]
Click the button to load the trading bot directly onto your canvas:
Templates are for educational purposes only.
The template is designed to run on the Daily Timeframe.
Your canvas should display these blocks. Check? Let's continue!
Step 1: Export the Trading Bot [1 Min]
Before diving into customization, export the bot with the upper-right export button to download the file.
Step 2: Upload to MetaTrader 5 [4 Min]
Don’t know how? Refer to our help article "Exporting Your First Strategy".
Step 3: Understand the Logic [10 Min]
Don’t worry, this is one of the easiest strategies you can build. Let’s focus on the buy-side only of this strategy for the following sections.
Check if price is above the 100 EMA. We start with a Run at time block and set the time to just after market open at 01:00 AM. We connect a trade rule block to it that checks if:
Candle close Candle ID 1 > Moving Average Exponential period 100Check if price is above the 20-day high. We add another trade rule block and specify that:
Candle close Candle ID 1 > Market Property, Highest price candle period 2 - 21 Price value
No open trades. Use a count trades block to specify that there are no open trades yet
Buy now. Use the buy now block to open the trade. This strategy has a percentage of price stop-loss and a percentage of stop-loss take-profit
Candle high/low trailing management. Navigate to Templates > Management Templates and select the Candle High/Low stop-loss management template. Apply it to the chart.
This is what the strategy looks like on a chart.
Step 4: Make It Your Own [10 Min]
You can adjust and experiment:
Add more strategy rules or include the Donchian Channel Strategy in your own strategies
EXPORT and see the differences.
Play around with timeframes and assets
EXPORT and see the differences.
Refine the rules to fit your own interpretation of the Donchian Channels concept
EXPORT and see the differences.
Click the button to load the trading bot directly onto your canvas:
Templates are for educational purposes only.
The template is designed to run on the Daily Timeframe.
Conclusion
Donchian Channels are a unique way of identifying breakouts and trend continuations. They are mechanical and universally applicable across all markets. Now it's your turn—apply the template, tweak the logic, and make it yours. 🚀