Donchian Channel

The Donchian Channel is a technical indicator made of three lines drawn from the last N candles (commonly 20): the upper line is the highest high over that period, the lower line is the lowest low, and the middle line is their average. A close beyond the upper or lower edge means price has stepped outside its recent range, which is the core breakout signal — it is the foundation of the Turtle trading system, devised in the 1950s by Richard Donchian.