Donchian Width

What is Donchian Width?

Donchian width is the vertical distance between the upper and lower lines of Donchian channels: the highest high of the last N bars minus the lowest low over the same window. Because it is built from range extremes rather than dispersion around a mean, it behaves differently from deviation-based measures: it can only expand when price prints a new extreme, and it only contracts when an old extreme ages out of the lookback. The result is a step-like series that summarizes how much ground price has actually covered.

Raw width is in price units, so it is usually normalized, divided by the channel midline or the close, before readings are compared across instruments or across time. Narrow width reads as compression, widening as range expansion; neither says anything about direction on its own.

How traders use it

• As a compression screen: width that is narrow relative to its own recent history flags consolidations where a breakout attempt becomes more likely, though never scheduled.
• As expansion confirmation: width turning up as price clears a channel extreme distinguishes genuine range expansion from a marginal poke above old highs.
• As a volatility input: normalized width can drive adaptive lookbacks, stop distances, or position sizing much like ATR, with the caveat that it updates only when extremes change.