DONCHIAN (Donchian Channel)

The Donchian Channel plots the highest high and lowest low over a lookback period, with a midline that serves as a trend baseline.

Declaration

function init(ctx) {
  ctx.indicator('channel', 'DONCHIAN', { period: 50 });
}

Options

Output

Returns an object with three series:

Accessing Values

function onBar(ctx, i) {
  // Multi-output indicators use underscore naming
  const upper = ctx.ind.channel_upper[i];
  const middle = ctx.ind.channel_middle[i];
  const lower = ctx.ind.channel_lower[i];
}

Use Cases

Trend Direction (Baseline Strategy)

The middle line serves as a dynamic baseline for trend detection:

function init(ctx) {
  ctx.indicator('ema', 'EMA', { period: 21, source: 'close' });
  ctx.indicator('baseline', 'DONCHIAN', { period: 50 });
}

function onBar(ctx, i) {
  const ema = ctx.ind.ema;
  const baseline = ctx.ind.baseline_middle;
  
  // EMA above baseline = bullish trend
  if (q.crossOver(ema, baseline, i)) {
    ctx.order.market('ASSET', 1, { signal: 'buy', reason: 'trend_bullish' });
  }
  
  // EMA below baseline = bearish trend
  if (q.crossUnder(ema, baseline, i)) {
    ctx.order.close('ASSET', { signal: 'sell', reason: 'trend_bearish' });
  }
}

Breakout Detection

Trade breakouts above the upper channel or below the lower channel:

function onBar(ctx, i) {
  const close = ctx.series.close[i];
  const prevClose = ctx.series.close[i - 1];
  const upper = ctx.ind.channel_upper[i];
  const lower = ctx.ind.channel_lower[i];
  
  // Bullish breakout
  if (prevClose <= upper && close > upper) {
    ctx.order.market('ASSET', 1, { signal: 'buy', reason: 'breakout_high' });
  }
}

Multi-Timeframe Baseline

Use different periods for entry and exit signals:

function init(ctx) {
  ctx.indicator('slowBaseline', 'DONCHIAN', { period: 50 });   // Trend
  ctx.indicator('fastBaseline', 'DONCHIAN', { period: 26 });   // Partial signals
}

Calculation

Upper = Highest(High, period) Lower = Lowest(Low, period) Middle = (Upper + Lower) / 2

Related

• PPO Indicator - Risk oscillator often used with Donchian
• TDR Strategy - Full example using Donchian baseline
• init() - Indicator declaration