Donchian Channels
A Donchian Channel is a technical indicator showing the range between an upper band (highest price) and a lower band (lowest price) over a set period, with a median line based on the moving average of a security’s price. Visually, it forms three lines: the upper, lower, and middle. Traders use it to spot breakouts or trends—prices hitting the upper band signal strength, while the lower band indicates weakness. It’s a simple, effective tool for gauging volatility and potential price reversals in markets.
Related Terms
EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric...
Cash Contract
A cash contract is an agreement between two parties where goods are delivered at a...
Accrued Interest
Accrued interest is the interest that accumulates during the current accounting period but remains unpaid...
Capture Ratio
The capture ratio helps investors evaluate how well an asset or portfolio performs during both...
Basing
Basing occurs when a security’s price moves sideways after an extended decline, forming a “base”...
Abc Wave Theory
The ABC Wave Theory, also known as Elliott Wave Theory, is a method used to...
