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Donchian MA Bands

By LuxAlgoOct 5, 2023

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Donchian MA Bands applies Donchian channel logic to moving average values instead of raw price: it takes the highest and lowest MA readings over a lookback, then iterates that calculation to build layered dynamic zones. The result is a pair of clouds that hug price during trends (a dominant lower zone in uptrends, a dominant upper zone in downtrends), with each zone doubling as potential support or resistance.

How to Trade the Donchian MA Bands?

  • Price holding above the lower zone: uptrend conditions, with the zone acting like trailing support.
  • Price holding below the upper zone: downtrend conditions, the zone serving as dynamic resistance.
  • Breakout dots: in Bands mode, dots print when price closes beyond the extremities, boundary breaches to combine with your own entry, exit, or stop logic rather than standalone buy/sell calls.
  • S/R zones: with Clouds, Upper Band, or Lower Band active, filled areas mark gaps between successive extremes; repeated tests set up bounce trades, clean breaks suit breakout plans.

By default the script also plots the midpoint of the highest and lowest values, a simple trend reference. Breakout signals behave best in trending markets; in ranges they more often flag tops and bottoms, worth remembering when pairing this with other trend tools.

Donchian MA Bands Settings

  • Style (default Clouds): Clouds, Upper Band, Lower Band, or Bands. Bands adds one more Donchian iteration and enables the breakout dots.
  • Type MA (default VWMA): SMA, EMA, RMA, HullMA, WMA, VWMA, DEMA, TEMA, or NONE.
  • Length (default 20): lookback for both the moving average and the Donchian pass; longer settings smooth the zones but respond later.
  • A second Type MA and Length pair (defaults VWMA, 20) under S/R drives the support/resistance zones.

Frequently Asked Questions

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