Limited Donchian Channel Forex Indicator
The limited donchian channel indicator for MetaTrader4 is a modified Donchian Channel deployed to spot price breakouts below or above recent price history.
The limited donchian channel indicator is designed to plot current high and low price boundaries. Instances where the current price breaks above or below such boundary, then we should expect some trading opportunities.
The Donchian Channel trading strategy was made popular by the Turtle Traders during the 1980’s. Support and resistance levels can be greatly understood when using the Donchian Channel.
When the market experiences heavy fluctuations in price, the Donchian channels widen, it also narrows when the market is somewhat flat. Ideally, traders use 20 periods with the Donchian Channels as its default setting, but on the Limited donchian channel indicator the value of the period is set to “50.”
Breakouts in currency pair movement can be identified using the Donchian Channels, thus allowing traders make decisions regarding long or short positions.
Traders can enter a long position, when the currency is trading higher than the middle dark khaki colored dotted line and enter a sell position when the currency is trading below the middle dark khaki colored dotted line.
The outer bands serve as levels of support and resistance, even so you’ll still require another technical tools to confirm reversal.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (periods, distance, fixed), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: support/resistance, pattern