Price Channels are also known as Donchian Channels, i.e. they are named after Richard Donchian. They use the maximum and minimum prices of the specified periods to create an upper and lower channel or envelope around the price. The upper channel shows the maximum of all selected periods. The lower channel shows the minimum of all selected periods. For example, the screenshot shows the price channels for 20 periods. The upper channel in the screenshot shows the maximum of the previous 20 bars. The lower channel in the screenshot shows the minimum of the previous 20 bars.

It is usually used to monitor the breakdown of the channel price and the achievement of a new high or low. This may indicate the beginning of a new trend if the price continues to rise or fall. This is the most widely known indicator from the Turtle System for futures markets. Richard Dennis, William Eckhardt, Dale Dellutri, and the Turtles used one system using price channels at 20 and 10 bars and a second system of price channels at 55 and 20 bars.

You can change the number of bars used for the calculation. One input parameter:

• Periods: The number of bars used to calculate the upper and lower price channels.