Donchian Channels

Indicators · Bands & Channels

Rolling HH / LL envelope — the classic turtle breakout channel.

Donchian Channels draw the highest high and lowest low of the last N bars as two lines, with their midpoint between. It's the simplest channel there is — and one of the most famous, because it's the core of the legendary Turtle Traders' breakout system. The upper line is "the highest price anyone's paid recently"; a close above it means price has broken to new ground, which is the purest definition of a breakout.

How it works

Over the Period (default 20) the block plots the Upper line as the rolling highest high, the Lower line as the rolling lowest low, and the Mid line as their average. When price makes a fresh N-bar high or low, the block fires Break ↑ or Break ↓ (drawn as arrows) — these are the breakout events the channel exists to flag. There's nothing to smooth or tune beyond the look-back period itself.

When to use it

Donchian Channels are a breakout and trend tool. The Turtle approach: go long on a break of the upper channel, short on a break of the lower, and use a shorter-period opposite channel as the trailing exit. They work best in markets prone to sustained trends and worst in choppy ranges, where price pokes just past the channel and reverses (the classic false breakout). The Mid line is also a decent mean-reversion target and dynamic support/resistance.

Example

Donchian Channels on EURUSD · H1

A turtle-style breakout: wire bars into a Period 20 Donchian Channel and route Break ↑ into a Buy Signal, gated by ADX / DMI so you only take breaks when a trend has strength behind it (cutting the false pokes). Trail the exit with a shorter Donchian or a Trailing Stop, and backtest in the Tester.

Tips & gotchas

• It's the original breakout channel — simple, robust, and famously profitable in trending markets.
• False breakouts are the enemy. Filter with a trend/volatility gauge (ADX / DMI, Choppiness) to skip the chop.
• Period is everything — shorter channels break often (noisy), longer ones break rarely (cleaner, later).
• Use two channels — a long one for entry, a shorter opposite one for the trailing exit.

Related blocks

• Keltner Channels
• Bollinger Bands
• ADX / DMI
• Trailing Stop

Inputs

Socket	Type	What to wire in
Bars	bars	Price bars

Outputs

Output	Type	Plots as	Description
Upper	series	Line	Rolling highest high
Mid	series	Line	Midline of the channel
Lower	series	Line	Rolling lowest low
Break ↑	signal	Signal arrows	New high broken
Break ↓	signal	Signal arrows	New low broken

Parameters

Parameter	Type	Default	What it does
Period	number · 2–500	20
Band color	colour	#80cbc4
Middle color	colour	#b0bec5

---

Reference auto-generated from the block catalog · category Indicators.