Donchian Trendline - Support Resistance Slope

The Donchian Trendline - Support Resistance Slope indicator identifies dynamic trend-based levels by generating sloped support and resistance lines whenever price hits new periodic highs or lows. This tool helps traders visualize potential breakout zones and trend reversals by combining Donchian Channels with automated trendline projections.

Usage

The indicator can be used to identify trend continuation and exhaustion points. The upper slope serves as a dynamic resistance line, while the lower slope acts as a dynamic support line.

• Long Entries: Traders often look for a buy signal when the price close crosses above the upper resistance slope.
• Short Entries: Traders can look for short opportunities when the price close crosses below the lower support slope.
• Trend Confirmation: The Donchian Channel background (Upper and Lower zones) provides a secondary confirmation of the current volatility range and trend direction.
• Mirror Mode: Enabling this feature creates symmetric projections relative to the Donchian midline, offering an alternative view of market structure.

Details

The script functions by tracking Donchian Channel extremes (highest highs and lowest lows) over a user-defined length. When a new high or low is reached, a starting pivot is established. From this point, the indicator calculates a slope based on the Average True Range (ATR) and a multiplier. This creates a decaying or ascending line that price interacts with. Additionally, the script includes a "Long Candle" highlight feature that color-codes bars based on their size relative to the ATR, helping to identify high-momentum movements.

Settings

ATR and Slope

• ATR Period: Sets the lookback period for the Average True Range used in volatility calculations.
• Source Upper/Lower: The price source used for the ATR band calculation.
• ATR Multiplier Upper/Lower: Adjusts the width of the ATR bands used to grade candle sizes.
• Slope x: Determines the steepness of the support and resistance trendlines.

Donchian and Logic

• Donchian Length: The lookback period used to determine the highest highs and lowest lows.
• Mirror Line: When enabled, reflects the trendline projections across the Donchian midline.
• Short Mode On: Toggles the inclusion of short-side signals and logic within the strategy components.

FAQ

How do I use the Donchian Trendline - Support Resistance Slope?

The indicator is primarily used to spot breakouts. Look for price closes above the green dotted slope for bullish signals or below the red dotted slope for bearish signals.

What do the background colors signify?

The shaded background represents the Donchian Channel range. Green zones indicate the upper half (bullish bias), while red zones indicate the lower half (bearish bias). Darker background highlights represent active slope break signals.

How can I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.