4 EXPLOSIVE Tips for Trading with the Donchian Channel


hey hey what’s up my friend so in today’s video I will share with you how you can use the dungeon channel to better time your entries filter for high probability trading setups write massive trends in the market and identify explosive breakout traits before it occurs so all this and more I’ll see you there ok so first and foremost what is a dungeon channel how do I get this indicated on my channel if you’re using trading view just go down to the indicator tab search for dungeon right and you click this one over here and here’s what you see on your chat right the dungeon channel comes with the default 20 period setting so let me explain to you what these 3 lines mean number one alright this over here is a upper BAM right it simply means this is the 20-day high 20-day high this one over here is the lower band it means this is the 20-day low and the middle band right it’s simply the average of the upper and lower bin right so for example if the upper Bann let’s say the value is a hundred lower band value is let’s say it’s 50 right so the average between the two is 75 how you get 75 100 plus 50 divided by 2 you get 75 so this is the value of the middle band is simply the average between the upper and lower bed okay now that you have understand why the basics of dungeon channel how can you you know use this in your trading right so let me share with you the first tip right the first step is that you can use dungeon channel right to help you filter for high probability trading setups right in fact you can help you to trade with the trend here’s how right let’s say you want a trade of the trend right what you’ll do is pay attention to the middle bit and where the price is relative to the middle bit so if the price is below the middle band okay then you look for shock trading opportunities means you look to sell right if the price is above the middle band then you look for long training opportunities meaning you look to buy alright so this is a simple filter that will keep you on the right side of the markets morphed and they’re not okay so that’s the first thing we can do with the dungeon Channel to help you know filter for the trend direction second thing right a dungeon channel can do for you is to help you time your entries right what you can do is you can look to trade breakdown or the break-up right you can see they over here this this disc and over here pretty much made a new 20 day low you can look to shop the market as a price made a Newt we need a low all right alternatively this candle over here made a new 20-day high so you can look to buy the market right as the price makes a new 20-day high so this is only to serve as an entry trigger this is not a strategy but just an entry trigger it allows you to enter on the breakout as it makes a new you know 20-day high or low right but again you don’t want to be trading simply based on this entry trigger you wanna you know you take into consideration the trend of the market and stuff like that okay so second thing that the dungeon Channel can do for you is to help you time your entries to trade breakouts now the third thing a dungeon channel can do for you is to help you write massive trends here’s how it works right if you can see right let’s say for example you are shot this market this crude oil market let’s say the market bricks this uh this low over here this 20-day load you gonna shop okay let’s say your stop-loss right it’s uh it’s above this swing high let’s say you put it somewhere here right 180 are above it’s somewhere here and you can trigger your stop-loss right using this middle band over here so this means right if the price doesn’t break above the middle band you will stay shot you hold on to your short position so we can see that this market pretty much you know just hit lower right and only breaks above it over here okay and this is where you exit the trade so you can see that the dungeon channel can also let you write massive trends right by you know referencing the middle band to trill your stop-loss right the middle bit and and another thing that I want to share with you is that the dungeon channel right works very well with the average true range indicator so let me just pull out this ATR indicator right we’ll just use the default settings as well all right don’t have to be too fancy on this okay and uh I like to look at the weekly chart right and the thing that I like to look for is to see low volatility right in the markets in fact I like to see that the ATR value is at multi-year lows this means that the ATR value right over the last two or three years this is the lowest level right this is what I’m looking for right so you see key you can see that in this case all right crude oil over here around the April May June July period the ATR on a weekly timeframe is that multi-year lows okay this means that there is very low volatility in the crude oil market right in the Brent oil futures market and this coincides with this price section where the price is pretty much still contained within this a dungeon channel right within this area okay so what is let me redraw this right so let me just okay here right it’s pretty much coincides with somewhere here so what happens is that when the market is in a low volatility period right it’s not gonna stay low forever volatility will expand right you have no idea when it’s going to expand whether it’s gonna break up higher or lower right so what you can do is that to trip the breakup of the dungeon channel if he breaks down lower you go short okay and with the hope that volatility would expand and in this case it did expand you can see that volatility picked up right ask the market collapse lower okay and now this is a very powerful technique because he can help you find you know very high probability explosive breakout traits before it occurs by using the average true range indicator and the dungeon Channel so again if you’re not trailing stop loss right you can drill it right let’s say using the middle band right if you want to or you can drill it on the you know the previous candle high or low if that’s what you prefer as well right by this timing works right and it’s very powerful to find you know explosive breakout traits so let me share with you a few more examples okay so this is palladium futures right you can see that over here multi-year low volatility around here which coincide with somewhere over here right so when the market breaks above the dungeon channel you go long right and depending how you’re no trigger stop-loss you can’t really no under using the middle band that’s what I’ve shared with you earlier and you could have you know captured this this move up higher on the weekly timeframe so of course this isn’t foolproof right there you know times where you’re loose as well so I can share with you example I would say this one might be a losing trade can see that low volatility over here right then you have this break out over here depending how you trailer stop-loss it might be a loser or maybe just a small gain for you as well so this is a very poor right then you can use to you know find explosive breakout treats before it occurs using the dungeon channel and the average true range indicator so now I just want to do a quick recap right to what you have learnt today right number one right you learn about the dungeon Channel it can help you filter for high probability high probability trading setups to know we know which is the direction of the trend you should be trading number two helps you to time your entry right by trading the break of the upper or lower bin number three you can use it to drill your stop-loss right by you know referencing the middle band to trail your stop-loss and number four I share with you is this ATR and the dungeon channel combo to find explosive breakup traits in the market all right so now if you wanna learn more you can go down to my website trading with Rainer comm right and just scroll down to the bottom right and you can see these two trading guides right the ultimate trend-following guide and the ultimate guide to price action trading all right if you want to learn how to write massive trends and market go and download this right over here right a trend following guy because I will share with you practical trading strategies and techniques right – right massive traits and if you learn more about price action trading right – better time your entries and exits you can download this ultimate guide to price action trading right both of them are completely free just come down to come down to my website trading with Rainer calm all right click on this blue button and I’ll send it to your email for free right so we that’s it I have come to the end of this video right II have enjoyed it right off you have any feedback comment let me know in the comment section below right and hit the like button subscribe to my youtube channel right so that you always stay up to date with my videos and you know new trading strategies and techniques that you can use to profit in the financial markets right so that’s it I wish you good luck and good trading I’ll talk you

37 thoughts on “4 EXPLOSIVE Tips for Trading with the Donchian Channel”

  1. Hi Rayner, I remember you had mentioned before, your trading methodology (PA, trend following, breakouts) does not require indicators as they are always lagging. However, I noticed lately, you have been introducing indicators. May I hear from you about the new implementation of the indicators in the trading plan? 🙂

  2. Nice video man! My friend likes using the keltner channel indicator, it's basically drawing the upper and lower boundaries of a channel using ATR values added and subtracted from the moving average. Maybe there's a strategy in combining the two indicators where you'd wait for the keltner channel to get narrow, then enter on a breakout of keltner upper or lower confirmed by the donchian channel. I think that might be the way to automate the entry signal you described in this video. What do you think? I could code it up for metatrader if you want.

  3. Hi Rayner – Thanks for all your so useful videos. Can you cover (or send me the link if you have already covered), the topic of how to find good swing trades for long. Thanks again.

  4. Hi Rayner, how can I identify the difference with the Donchian Channel and the Bollinger Bands, since they looks the same?

  5. Hi Rayner,
    Where is the best area to put stoploss. It's too large if i entry upper channel & place stoploss at the middle channel. Please advise me. Thank You!

  6. Excellent Video. I got new TOOL information. I have two quotation.
    1. Can we use this TOOL 15mints chart, if use we need to change any setting.
    2. Any other combination tools works with Donchin. Please explain.

  7. Thank you very much for this video Rayner I appreciate :))) Can you share a video about Darvas Box also? kind regards

  8. thanks a ton Rayner!! Must mention you have a very unique & awsome style of making videos on indicators!
    what i like about all your indicator videos is that they are not superficial knowledge like others.
    you start right from the basics of "what & why" of an indicator & go right up to "how to use" those indicators like a pro! this adds so much sense & value while using these indicators!
    keep up the good work…….thanks again

  9. hi Rayner someone stole my cellphone 2 years ago . I had dogecoin in dogechain wallet i cant go into my account cause i dont have my google authenticator . I try every thing i dont want to loose my coins. What can i do? do you know someone in dogechain to reset my account ? Thank a lot

  10. Love the middle DC as a stop-loss for day open strategies.
    What bothers me about all these indicator and strategy guides is, nobody explains the why and how behind it, only the how you do it.

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