How to trade with Donchian channel with RSI to gain maximum profit

(Last Updated On: January 19, 2022)

Signing up is free and takes 5 secs only…

Donchian channel is the trend indicator that helps us to identify the current trend and direction. This indicator uses three lines and is really easy to use.

Setting up the Donchian channel in Olymp Trade:

Setting up the Donchian channel in Olymp Trade is very easy.

Once you have signed up you will land on the Olymp trade dashboard.

Now, click on the indicator button and select the Donchian channel from the menu.

 

Similarly, select the indicator button and select RSI from the menu.

 

That’s it!! The basic setup is over.

 

What is the Donchian channel indicator?

 

The Donchian Channel is one of the most popular indicators of all time. This indicator is used by traders to identify the possible trend & reversals.

This indicator was developed by one of the greatest of all time Richard Donchian in 1970.

While trading financial derivatives you need to make assumptions about the price movements. Your success depends on the ability to identify the possible trend & its reversal. and the Donchian channel will help you do that.

You can easily identify the possible trends & reversals via this indicator much better than Bollinger Band.

This indicator uses three lines to identify the trend:

Upper line: This line is at the top of the lines and it takes the highest value per n periods.

Lower Line: Similarly, This line is at the bottom of three lines and it takes the lowest value per n periods.

Midline: This line takes the average of the upper line and the lower line.

 

How to Trade?

Trading with this indicator what we need to remember is:

If we see the Donchian channel upper line is in a plunge or falling position plus the RSI line is near the overbought level so here, we should take a sell trade.

Similarly, If we see the Donchian channel lower line is in a rising position plus the RSI line near the oversold level so here, we should take a buy trade.

Now’ Let’s few examples:

 

Given above is a 1- hour chart, and as we can see above that the Donchian channel upper line is in a plunge or falling position plus the RSI line is near the overbought level so here, we should take a sell trade.

 

 

Similarly, Given above is a 1- hour chart, and as we can above that the Donchian channel lower line is in a rising position plus the RSI line is near the oversold level so here, we should take a buy trade.

Final Point:

Donchian Channel is one of the most popular trading indicators that uses three lines including the upper line, middle line, & lower line.

This indicator was developed by one of the most famous names in the field of trading Richard Donchian.

Richard Donchian is one of the most legendary figures in the field of trading. He has done a lot for our trading community.

In 1949, He organised the first futures fund futures Inc. which became the prototype of mutual funds in the United States.

In addition, he created a well-known system of turtles. In the early 1970’s he developed a so-called sliding channel, which was later named after him Donchian channel.

Here, In this article. I have covered the easy Donchian Channel Strategy with RSI. You just need to remember the easy golden rule.

In this article, I have covered Donchian Channel Strategy, Donchian channel indicator, Channel Breakout Strategy, Donchian channel trading, Channel Trading, Channel trading strategy & more