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The Donchian channel is one of the best indicators that Pocket Option offers to identify the current trend and reversals. In this, article, I will cover everything about Donchian Channel and how you can use it to place high quality trades on Pocket Option
Configure Donchian channel indicator on Pocket Option
Now, click on the pencil icon and change the colours for better visibility and for comfortable trading.
What is a Donchain Channel?
Donchian Channel is a trend indicator developed by the father of trend following Richard Donchian in the mid 20 century.
This indicator is made from the composition of moving averages calculation. If you observe the indicator properly, you will notice three lines in the indicator where the first line is the highest price of a security over n periods Similarly, the third line is the lowest price of a security over n periods and the area between the upper and lower line is the Donchian channel.
Donchian Channel Strategy: How to use Donchian Channel on Pocket Option
Using the indicator isn’t tough. You won’t find many issues in understanding the concept. You basically need to understand the basics of the three lines of the indicator. The price oscillates between three lines which creates buy and sell opportunities. The first line represents the bullish trend similarly, the bottom line represents the bearish trend and the middle line represents the average of two.
Buy at Upper band
When the price intersects the middle line from the bottom and later the price is still staying above the middle line is the indication of the bullish trend and here we can place a buy trade.
Sell at the Lower band
Similarly, when the price intersects the middle line from top, you wait and notice that the price staying below the middle line is the best time to open a sell trade.
So, I have done my part. I have explained to you how to use the Donchian channel and trade with the same. The best thing you can do today is trying this trading strategy on the Pocket Option demo account and shift to the Pocket Option real account once, you are confident enough. also do comment below and share your opinions. Till then Happy trading! 🙂