Q&A Thread: Donchian Channel
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Does plotting on PF charts has any specific use i any strategy or scanner?
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@Sumit Badwani Very nice. Perfect
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@Ravi Shinde Wonderful. Perfect
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So, you can apply the Donchian channel to Ratio, P&F RS or Renko RS charts as well.
Rising donchian channel after flat bands indicates a breakout in the relative strength chart meaning numerator has started outperforming the denominator. Rising bands show that Numerator is an outperformer.
The rising bands on a relative strength chart and a price chart is a perfect setup for identifying outperformers.
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@Sumit Badwani
All methods of reading the Donchian channel are applicable to P&F charts as well. Remember, the channels are plotted on swings. Rising upper bands show the breakout. Rising upper and lower bands show that swing lows are also increasing.A rising upper band (bullish) or a falling lower band (bearish) can be scanned.
You can also check the indicator digger of Donchian channel on P&F chart.
As mentioned earlier, the Donchian channel is a running turtle indicator. When you analyze the difference between bands (height of the band), the status of the band and the middle band ratio, you can get a better understanding of the swing range pattern.
Band trend is an important reading.
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@Prashant-Shah thanks for the inputs, as you mentioned the Donchain is applicable in all types of charting methods, can we build the scanner in RENKO RS to see if the asset has given a trend confirmation on either side if so yes then can you show the same in RZONE (Snapshot) and how more reliable or powerful would be the trend as per your experience.
for example this is BNF / NF renko, as we see the BNF is underperforming and given a bearish breakout on Renko RS, but if the Breadth is OS here then will this breakout work or it will fail ?
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This post is deleted!
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@Rahulsinh G. Thakore Yes, you can use Donchian on Renko RS as well. Donchian channel has been discussed on Renko charts as well as on RS charts. Combine them and develop the observations on Renko RS charts.
On Renko RS, rising Donchian indicators indicate bullish outperformance and falling bands indicate underperformance.
Breadth will help you decide what not to do.
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do we have PNF RS or RENKO RS breakout scanner or we need system builder
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@Rahulsinh G. Thakore Yes, P&F RS and Renko RS scanners are available in TradePoint and RZone. Trading systems that you have created for P&F or Renko charts can also be applied to P&F and Renko RS charts.
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@Sumit Badwani said in Q&A Thread: Donchian Channel:
No, it will be around 50 wk high as it would consider trading days only excluding holidays
Bullish is over upper band and bearish below lower band
3.yes, as we are using in DON 28 brick high -
Donchian channel and Bollinger band seems to be similar? Is there any gross difference between the two. Please enlighten.
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Ans:
- Stock is making lower high and higher lows = consolidating or side ways
- Stock is consolidating or sideways
- volatility is very high
- on renko chart it will show recent 20 bricks high