Donchian Channels and an expected-range band both draw an envelope around price, but they answer different questions. A Donchian Channel reports the highest high and lowest low of the last N bars. An expected-range band reports how far the next close has historically tended to land from the current level, with a stated coverage rate. Only the second makes a claim that can be scored.
A Donchian Channel is, by construction, a record of the extremes already seen in the window. Price sits inside it until it makes a new N-bar high or low, so touching the channel edge is the definition of a new extreme rather than a statistical event.
Only an indicator that attaches a stated rate to a range can be scored on coverage. A Donchian Channel attaches none, so there is nothing to test it against, and Oisigma has not published any Donchian test. Nothing here says how a Donchian Channel would score. Bollinger Bands® carry a nominal rate, and that has been measured: the Bollinger accuracy audit covers the (20, 2) result. The expected-range band's own rates are on the Proof page, as historical calibration; past behavior is not a guarantee of future results. The scoring procedure is explained in how to compare band indicators.
A Donchian Channel changes only when a new extreme is set or an old one leaves the window, so it moves in steps. A standard-deviation band changes every bar as the window's dispersion changes. The lookback period article covers how the window length affects a volatility band; the same trade-off between reactive and steady applies to the Donchian N.
It does not show that either tool helps a trader. The paper validates the range's calibration, not the profitability of any use, and whether a use delivers value after costs is an open question. The expected-range band has stated limits too: it runs too narrow in the first days of a fast volatility jump, and the outer band is slightly optimistic in the deep tails. Donchian Channels serve purposes outside this comparison, such as marking the visible range of a lookback.
What is the default Donchian length on TradingView?
The built-in uses 20 bars. The length is an input; changing it moves the extremes the channel records but not what the channel is.
Do Donchian Channels use highs and lows or closes?
Highs and lows. The expected-range band uses closes only; why closing prices matter explains the difference that makes.
Can both be shown on one chart?
Yes. No published test examines any combination, so this post makes no claim about one.
The method is in the working paper. The Behavioral Transform Model runs on TradingView with a 30-day free trial: start free, cancel anytime.
Oisigma provides descriptive market analytics for educational use. It is not investment advice, does not predict prices, and does not provide buy or sell signals. Statistics referenced are historical and were measured in our working paper (not peer-reviewed); past behavior is not a guarantee of future results. Trading and investing involve substantial risk of loss, including the possible loss of all capital invested. Leveraged products (futures, options, margin) carry additional risk and can result in losses that exceed your initial investment. Bollinger Bands® is a registered trademark of John Bollinger; Oisigma is not affiliated with or endorsed by Mr. Bollinger. RiskMetrics® is a registered trademark of MSCI Inc.; Oisigma is not affiliated with or endorsed by MSCI Inc. Nothing in this article is a recommendation to use any particular strategy. Read the full Disclaimer →
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