Donchian Channels are moving average indicators developed by Richard Donchian. They plot the highest high price and lowest low price of a security over a given time period.
 | | Term of the Day | Words to Know | | |  | | Donchian Channels | | Donchian Channels are three lines generated by moving average calculations that comprise an indicator formed by upper and lower bands around a mid-range or median band. The upper band marks the highest price of a security over N periods while the lower band marks the lowest price of a security over N periods. The area between the upper and lower bands represents the Donchian Channel. Career futures trader Richard Donchian developed the indicator in the mid-twentieth century to help him identify trends. He would later be nicknamed "The Father of Trend Following". | | Read More » | | Related to "Donchian Channels" | | | | Sign Up for 'Chart Advisor' | | Investopedia's expert analysts present market performance for the day and discuss with in-depth charting and technical analysis, a must read for traders. | | Subscribe» | | | Trendline | | A trendline is a charting tool used to illustrate the prevailing direction of price. Trendlines are created by connecting highs or lows to represent support and resistance. | | Read More » | | | Moving Average | | A moving average is a technical analysis indicator that helps smooth out price action by filtering out the "noise" from random price fluctuations. | | Read More » | | | Simple Moving Average | | A simple moving average (SMA) calculates the average of a selected range of prices, usually closing prices, by the number of periods in that range. | | Read More » | | | Candlestick | | A candlestick is a type of price chart that displays the high, low, open, and closing prices of a security for a specific period and originated from Japan. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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