What Is the Donchian Channel

Two walls from twenty days

The Donchian channel is two lines: the highest high of the last twenty days and the lowest low of the same twenty, with the space between them shaded and a third line halfway between. The lines step rather than curve. The upper one rises only when a new twenty-day high is made and falls only when the old high drops out of the window; the lower one does the same at the bottom. On 18 July 2025 gold's channel ran from 3394.70 down to 3249.01, 146 dollars tall.

A corridor

The picture is a corridor. The ceiling is the highest the price has been in the last twenty days and the floor is the lowest, and the price walks along between them. It cannot be above the ceiling, because the ceiling is by definition the highest it has been; the only way out is to make a new twenty-day high, and then the ceiling moves up to meet it. The same at the floor. The Donchian channel is that corridor, redrawn every day from the last twenty.

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