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Donchian Channels Indicator

Trading Term

A simple trend-following breakout system, this moving average indicator that plots the highest high and lowest low over the last period time intervals. The signals derived from this system are based on the following basic rules:

  • When the price closes below the Donchian Channel, sell short and liquidate long positions.
  • When the price closes above the Donchian Channel, buy long and cover short positions.

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