Calculation of donchian channel parameters and super trend

Calculation of Donchian Channel Parameters The calculation of Donchian Channels involves a separate calculation of the upper band, lower band, and the average middle line.. o The green l

A BUY SELL STRATEGY taking Advantage of the DONCHIAN Channels and SUPER TREND Formula AND construction The Idea is Explained Below.

Calculation of Donchian Channel Parameters

The calculation of Donchian Channels involves a separate

calculation of the upper band, lower band, and the average

middle line

The calculation is as follows:

 Upper band: Highest price in prior n periods

 Lower band: Lowest price in prior n periods

 Middle line: (Upper band – Lower band)/2

Calculation

Formula:

Supertrend Upper Line (RED line) = (High + Low) / 2 + multiplier × ATR.

Supertrend Lower line (Green Line) = ( High + Low) / 2 - Multiplier

× ATR.

What Supertrend indicator tells you,

o This indicator tells you the trend of the market

o The green line Formed below the candlesticks and red line

Formed above the candlesticks

o The green line Indicates the bullishness of the stock price

o The Red line indicates the bearishness of the stock price

o Also, the green line is giving you a support zone of the bullish trend And Similarly, Red Line is giving you a bearish trend

support zone

To get more correct buy and sell signal, you

can use RSI Indicator with the Supertrend indicator.

In the RSI indicator above 50 level of RSI is a bullish trend And below

50 level of RSI indicates a bearish trend

Also See: India Twitter Trends

Also See: Worldwide Twitter Trends

crossing above the 50 level This is the buying signal.EXIT: when the green line color changed to the Red line and started forming above the candlestick

Sell signal: when the Supertrend line is Red and the RSI is crossing

below the 50 level This is the selling signal Exit: when the RED line color change to green and started forming below the candlestick you can exit from the stock because this means the trend changed

Conclusion

The Supertrend Indicator will tell you, the securities trend It draws a line on the candlesticks And the line color and Position with the

changing of the trend

If the trend is bullish the green line will be formed below the

candlesticks If the trend is bearish the Red Line will be formed above the candlesticks.Super Trend gives a Buy or SELL Signal with RSI as explained above.Combining the two we have a Double Confirmed BUY or SELL signal.The DONCHIAN channel that acts as

RESISTANCE or SUPPORT can be used as a the stoploss OR

Decide Stoploss.If stoploss is far away from CURRENT price Avoid entry as the RISK is High or a reversal can result in a Loss

Now DONCHIAN CHANNEL GIVES SUPPORT or RESISTANCE when a HIGHEST HIGH or LOWEST Low in the Given Period is

Recorded