Donchian Channels - Do They Work? (Backtest S&P 500)
What are the Donchian Channels and do they work on stocks? Richard Donchian invented the Donchian Channels decades ago, but they are to this day still very popular.
The Donchian Channels (or bands) are formed by two bands: an upper band based on the high of the last N bars, and one lower band based on the low of the last N bars. The bands work well for trend following in commodities, but not in stocks. However, if we turn the rules upside down they work well for stocks.
Please continue reading here: Donchian Channels - what is it?
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