Use the Donchian Channel to time your entries, filter high-probability setups and ride massive trends.
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First and foremost, what is a Donchian Channel? How do I get this indicator on my chart? If you're using TradingView just go down to the Indicator Tab, search for Donchian, and you click this one over here, and here's what you see on your chart, the Donchian Channel. It comes with the default 20-period setting.
Tips for Trading with Donchian Channel #1
The first tip is that you can use Donchian Channel to help you filter for high-probability trading setups. It can help you to trade with the trend. Here's how. Let's say you want to buy with the trend. What you'll do is pay attention to the middle band and where the price is relative to the middle band. If the price is below the middle band, then you look for short trading opportunities. Means you look to sell. If the price is above the middle band, then you look for long trading opportunities, meaning you look to buy. This is a simple filter that will keep you on the right side of the markets more often than not.
Tips for Trading with Donchian Channel #2
The second thing a Donchian Channel can do for you is to help you time your entries. What you can do is you can look to trade the breakdown or the breakup. Can see that over here this candle over here pretty much made a new 20-day low. You can look to short the market, as the price made a new 20-day low. Alternatively, this candle over here made a new 20-day high, so you can look to buy the market as the price makes a new 20-day high. This is only to serve as an entry trigger. This is not a strategy but just an entry trigger.
Tips for Trading with Donchian Channel #3
The third thing a Donchian Channel can do for you is to help you ride massive trends. Here's how it works. You can see, right? Let's say, for example, you are short this market, this crude-oil market. Let's say the market breaks this low over here, this 20-day low, you go short. Let's say your stop-loss; it's above this swing high, let's say you put it somewhere here, one ATR above it, somewhere here. You can trail your stop-loss using this middle band over here. This means if the price doesn't break above the middle band, you will stay short, you will hold onto your short position.
Tips for Trading with Donchian Channel #4
The fourth tip is that the Donchian Channel works very well with the Average-True-Range indicator. Let me pull out this ATR indicator. We'll use the default settings, as well. I don't have to be too fancy on this. I like to look at the weekly chart. The thing that I like to look for is to see low volatility in the markets. I want to see that the ATR value is at multiyear lows. This means that the ATR value over the last two or three years, this is the lowest level. This is what I'm looking for.
If you want to learn more, you can go down to my website TradingWithRayner.com, and scroll down to the bottom, and you can see these two trading guides: The Ultimate Trend Following Guide and The Ultimate Guide to Price-Action Trading. If you want to learn how to ride massive trends in a market, go and download this guide over here, the trend-following guide, because I'll share with you practical trading strategies and techniques to ride massive trends.
If you want to learn more about price-action trading to better time your entries and exits you can download this Ultimate Guide to Price-Action Trading. Both of them are completely free. Just come down to my website, TradingWithRayner.com, click on this blue button, and I'll send it to your email, for free.
Thanks for watching!
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By Stock Chat

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30 thoughts on “4 explosive tips for trading with the donchian channel”
  1. Avataaar/Circle Created with python_avatars Linda King says:

    Sike!!! Even tho you didn't make this video I believe you're strategy!!! I've been watching your video ever since it actually helps me a lot. Hope to be noticed! Good job and God Bless!!!

  2. Avataaar/Circle Created with python_avatars Ron says:

    Hi Theo
    Thanks for these 3 tips using DC
    I'm wondering if this indicator is still relevant (5 years after this video) as the markets particularly the forex seem to be less and less in a trend structure?
    Thanks in advance for your enlightments

  3. Avataaar/Circle Created with python_avatars Mehrdad Mithra says:

    You have now 1.79 subscription for a reason. You are excelent . Big thanks , got a lot out from this video in 8 minutes.Please keep up this quality chanel.👍👍👍

  4. Avataaar/Circle Created with python_avatars Hieu Nhu Dinh says:

    what kind of condition triggers an alert in tradingview? which I should use with donchian

    Crossing
    Crossing Down / Crossing Up
    Greater Than / Less Than
    Entering Channel / Exiting Channel
    Inside Channel / Outside Channel
    Moving Up / Moving Down
    Moving Up % / Moving Down %

  5. Avataaar/Circle Created with python_avatars Funny Boy 25 says:

    The great one

  6. Avataaar/Circle Created with python_avatars Duddu Ranesh says:

    Excellent sir

  7. Avataaar/Circle Created with python_avatars G. Sinclair says:

    I like your style.

  8. Avataaar/Circle Created with python_avatars Hola! Danny Green says:

    Iv just learnt how to set this up the ribbon is great 👍

  9. Avataaar/Circle Created with python_avatars llea Nge says:

    donchian channel for weekly chart only?

  10. Avataaar/Circle Created with python_avatars Agnt. Gerald Sinclair NSA says:

    Maestro, muchas gracias. The most excellent explanation. Thank you so much. I love your channel by the way.

  11. Avataaar/Circle Created with python_avatars Hanre Marais says:

    Hi Rayner. Is there an email I can reach you on. I have a few questions for you. Thank you for all the great info.

  12. Avataaar/Circle Created with python_avatars SUN RISE says:

    Very clear,

  13. Avataaar/Circle Created with python_avatars Akif 95 says:

    Thank you, donchian channel useful to detect false signal.

  14. Avataaar/Circle Created with python_avatars all in one place says:

    Thanks brother,,, good info abt Donchain channel,, where from you?

  15. Avataaar/Circle Created with python_avatars Gourab Banerjee says:

    What is the compounded rate of return if someone had used this method over last 20 year period? I don't think it could beat market average. This system worked well and when a technical system works well more people use that and soon or later that system stops working.

  16. Avataaar/Circle Created with python_avatars Blockchain Sensei says:

    Appreciate this content!

  17. Avataaar/Circle Created with python_avatars Jalda Mahender says:

    Hi

  18. Avataaar/Circle Created with python_avatars SSK VLOGS says:

    Can i use it in intraday

  19. Avataaar/Circle Created with python_avatars Mangesh Tank says:

    hello

  20. Avataaar/Circle Created with python_avatars Timetravel_0 says:

    i'm not into swing trade, but if i ever start, i'll remember this video, thx

  21. Avataaar/Circle Created with python_avatars Shanu says:

    Very informative as always thanks❤🙏 Brother

  22. Avataaar/Circle Created with python_avatars Irfaan A.B. says:

    Thank you Rayner, after watching this for the 10th time. I'm ready to apply it right now >:D !

  23. Avataaar/Circle Created with python_avatars as ask says:

    Thanks

  24. Avataaar/Circle Created with python_avatars Sareh Day says:

    thank youuuuuuuuuuuuuuuuuuu

  25. Avataaar/Circle Created with python_avatars ANGEL ZEN says:

    Wht is The Time Frame of the Chart

  26. Avataaar/Circle Created with python_avatars Jep Gran says:

    can you show also a live trading example? thanks

  27. Avataaar/Circle Created with python_avatars Balalee says:

    bro if we follow donchian channel it seems to be buy high sell low then how can we take profits

  28. Avataaar/Circle Created with python_avatars siddharth kapkar says:

    Can we use this indicators for Intraday ? In 15 mins time frame ? Pls confirm sir..?

  29. Avataaar/Circle Created with python_avatars Wesker Steve says:

    Bullshit, to those who later visit this video: Oil plunged so low was because of Covid, in other word, fundamental news. Nothing technical.

  30. Avataaar/Circle Created with python_avatars Energy Fabricator says:

    I've been binge watching your videos for the last 2 days. I'm think I know enough to do something stupid!
    Thanks Rayner!! Great videos & I love the multiple examples. Invaluable information!

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