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Rolling extremes
The upper channel is the highest high and the lower channel is the lowest low over the selected lookback.
Lesson · Technical Indicators
Donchian Channels
Track rolling highest highs and lowest lows, compare current-bar and prior-channel calculations, detect completed breakout events, and state which bars define the boundary a close is tested against.
Synthetic educational data
Core concepts
Understand what the indicator calculates, how its parameters affect it, and what it cannot establish by itself.
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Prior-channel signal
Using the channel calculated through the previous bar allows the current close to be tested against an already known boundary.
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Stepwise updates
Channel levels can remain flat for many bars and then jump when a new extreme enters or an old extreme leaves the window.
Interactive lesson
Change the inputs, inspect the calculation, and compare the indicator with the underlying price data.
Signal markers compare the close with the prior channel. The display toggle demonstrates how including the current bar can move the boundary to the new extreme.
Define a Donchian breakout
Make the rolling boundary and bar timing explicit.
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Choose the lookback
Specify the number of completed bars used to establish the high and low.
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Choose current or prior channel
For a signal, state whether the current bar participates in the boundary calculation.
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Define the breach
Distinguish high above, close above, touch, and completed close.
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Define re-entry and exit
Specify how the rule handles repeated closes outside, opposite breakouts, and channel changes.
Rolling extreme channels
Score 0 / 0Choose the best answer.
Lesson rule
For a breakout test, compare the current bar with a boundary that was known before the event; otherwise the current extreme can redefine the level being tested.
Common mistakes
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Using the current high to test itselfA channel that includes the current bar is at least that bar’s high, and a close is never above its own high, so a close-above rule written against it can never fire.
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Counting every close above as a new breakoutDefine whether only the first transition outside is an event or whether repeated bars matter.
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Assuming a breakout must continueDonchian Channels identify new rolling extremes, not guaranteed acceptance beyond them.
Completion standard
✓
Finish when you can state exactly which bars define the channel.
Calculate current and prior Donchian levels, identify the breakout comparison, count events without double-counting states, and state the required confirmation and exit.
Calculation note: This lesson displays either a channel including the current bar or one through the previous bar, while signal markers always compare the close against the previous bar’s completed lookback.