The Don Cheyenne Channel Indicator indicator is a trend following indicator for MT4. It is used by traders to identify the beginning of upcoming trend directions, as well as to trade breakouts and trend following strategies.
The indicator provides the most efficient entry points, but also gives additional re-entry points in retracements. Channel width grows in volatile markets and decreases when trading in a stable environment. Finally, traders use the Doncic channel indicator to determine the volatility of the market.
Donchian Channel Indicator MT4 Indicator Trading Methodology
The EURUSD M30 chart above shows the process of the Donchian Channel indicator for MT4. It is created based on the prices of the highs and lows within the specified time frame in the indicator setup. The direction of the channel corresponds to the direction of the market trend. Obviously, in a market with a moving trend, the channel will move to one side. Therefore, it is clear that the Don Cheyenne Channel indicator shows an indication of the direction of the trend.
If the price is below the upper range and the indicator gives a “buy” signal. At the same time, the stop loss is set in the lower part of the channel and profit is taken based on the next signal , or in proportion to the risk-reward of the trade. On the contrary, a sell signal is generated when the price exceeds crossing the upper channel. Price retracement signals provide foreign traders with an additional entry point.
New traders can benefit from using this indicator to identify the beginning of a trend, or they can enter the market early in the development of a continuing trend. However, experienced traders can use the indicator to look for retracement signals in order to add more positions in trending markets and increase their returns.
An effective way to trade trends is to trade with different time frames. MT4’s Don Cheyenne Channel indicator provides superior results when trading with a multiple time frame strategy. Because the larger time frame charts show the trend in a clear manner, forex traders use these charts to determine the direction of the trend. However, shorter time frame charts will help to identify the most appropriate entries and exits in the main direction of the trend and to follow it in a safe manner. Its MT4’s Don Cheyenne Channel indicator is an ideal tool for trend trading as well as breakout trading.