Channel Donchian constructed by taking the highest (maximum of High) and lowest (minimum of Low) rates for the previous period, followed by the designation of the region between them on a chart.
Donchian recommend using your indicator for the daily timeframe with an interval period = 20, other authors suggest experimenting with an interval increasing it.
The tool is purchased (a long position), when the current maximum of its price exceeds the maximum value of the channel, and sell (go short) when the current drops below the minimum of the minimum channel values.
Additional ways to use
Donchian channel - a useful indicator for monitoring the volatility of market prices. If the price is stable, the Donchian channel will be relatively narrow. If the price varies greatly, the Donchian channel will be wider.
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