Mikula Forecasting Company
Mikula Forecasting Company
The picture below shows three indicators, the Donchian Bands and the Donchian %b and the Donchian Bandwidth. The Donchian Bands are used to determine if the market is in an uptrend or a downtrend. When the price moves above the upper Donchian band the trend is up and when the price moves below the lower Donchian band the trend is down. The Donchian %b converts the information in the Donchian Bands into an over bought and over sold indicator for swing trading. When the Donchian %b is above the upper boundary line a swing top may form and when the %b moves below the lower boundary line a swing bottom may form. The Donchian Bandwidth indicator shows the distance between the lower and upper Donchian bands. This is used to find unusual situations when the stand between the two lines is exceptionally large or small.
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