Technical Indicators · Donchian Channels

The highest high. The lowest low. That's the system.

A Donchian Channel is the simplest breakout indicator possible: the upper band is the highest high of the last N bars, the lower band is the lowest low. Vant8 uses the classic Turtle Trader configuration on Perp Trend Following — enter on a 20-bar high, exit on a 10-bar low — because it captures real breakouts without curve-fitting to a noisy oscillator.

What it measures

Whether today is breaking out of recent range

The bands tell you where the recent extreme prices have been. A close above the upper band means today is breaking out to a level we have not seen in N bars. A close below the lower band means the opposite. There is nothing to interpret — it either broke out or it didn't.

Upper band

The highest high over the entry lookback (default 20 bars). Close above it is a breakout to the upside.

Middle

The midpoint between the upper and lower bands. Surfaced for context — not used by the strategy logic.

Lower band

The lowest low over the exit lookback (default 10 bars). Close below it is the exit signal for a long.

Computation

There is no formula — just maxima and minima

entryHigh = max(high[−entryPeriod : ])
exitLow = min(low[−exitPeriod : ])
Computed inline in the Perp Trend Following strategy — no smoothing, no scaling, no normalisation. The simplest indicator in the catalogue.
Defaults

The Turtle defaults

Vant8 ships the asymmetric configuration popularised by the Turtle Traders: a longer lookback to find an entry, a shorter lookback to confirm an exit. The asymmetry is on purpose — it lets winners run while cutting losers fast.

Entry period: 20 bars

A new 20-bar high (long) or 20-bar low (short on perp) triggers a candidate entry. Most random ranges do not break their 20-bar high — when one does, it's a meaningful event.

Exit period: 10 bars

A break below the 10-bar low closes an open long. The shorter window means the exit fires before a full reversal completes.

Vant8-specific

Computed inline, paired with ATR and ADX

The Donchian read is computed inside the Perp Trend Following strategy itself rather than as a generic indicator output — because the breakout is the entry decision, not just a number on a chart. ATR sizes the stop; ADX gates the entry; Donchian fires it.

ADX gates the breakout

A breakout in a market with no trend strength is a textbook fake-out. Perp Trend Following requires ADX above its trend gate before treating a Donchian break as a valid entry.

ATR sizes the stop

Once the breakout fires, the stop is placed at a configurable ATR distance below entry. Adds are spaced at a fixed fraction of ATR for pyramiding.

Where it shows up

Strategies that consume Donchian Channels

Perp Trend Following
Primary entry + exit — enters long on a break above the 20-bar high; exits when price breaks below the 10-bar low (the Turtle Trader template).
How to read it

Where Donchian Channels can mislead you

Range-bound markets eat breakouts

A 20-bar high in a sideways market is just noise breaking out by a tick. Without an ADX gate, this is the textbook failure mode of the indicator — and the reason Perp Trend Following always pairs the two.

No information about how far the break goes

A close above the upper band means a breakout has happened — not how big it will be. ATR-based stops and pyramiding manage the distribution of outcomes; the indicator itself just fires the gun.

Pick a strategy that uses Donchian Channels.

The strategies listed above are deployed from the Strategies page on your dashboard. Each one ships with sensible defaults you can tune before deployment.