Smart Start TA Series 44: The Donchian Channel – A Tool for Breakouts and Trend Reversals

In Smart Start TA Series 40: How to Use the Keltner Channel for Trading Breakouts, we examined how volatility-based channels help traders identify potential breakout points. The Donchian Channel is another valuable tool for spotting breakouts and potential reversals. Unlike the Keltner Channel, which uses the Average True Range (ATR), the Donchian Channel is based on the highest high and lowest low over a specified period, making it especially useful in volatile markets like crypto.