DonchianLower

Description

This formula works in tandem with the DonchianUpper formula to render the Donchian Channels study.

The Donchian Channels study is moving average indicator developed by Richard Donchian. It plots the highest high and lowest low over a given number of periods.

Formula

DonchianLower(INPUT, Period=20)=begin

   retval = rmin($1, Period)

end

Parameters

INPUT

The INPUT directive makes this formula available as a Formula Overlay. INPUT refers to the instrument in the chart.

Period

The number of periods, or length, of the Donchian Channel sample set. The sample set is the data in which the lowest low is identified. The default is 20, or four weeks.

Return Value

The lowest low in the sample set.

Examples

Comments

The Donchian Channels study is a simple trend-following, breakout system. The signals derived from this system are based on the following basic rules:

1. When price closes above the Donchian Channel, buy long and cover short positions.

2. When price closes below the Donchian Channel, sell short and liquidate long positions.