[Overseas FX Video] Target 10 pips to 20 pips with Donchian Channel indicator
From an overseas FX YouTube video
Video title
How to Use Donchian Channels for Breakout Trading?
Well, these several methods have been presented
Honestly, I don’t think they’re extremely good, but you can tell the quality is different from Japanese FX explainers
How low Japanese paid FX materials are…
In Japan, breakout and trend-following
Even among high-cost paid FX info products, there are incredibly low-quality ones
that are still popular, and you often see such cases
I watched something like this recently
“100% win rate” that anyone can reproduce! …
It’s ridiculous, but it’s probably selling well
Now, the main topic
First, the conclusion
In one sentence, the gist of this video is
“Enter in the direction of the higher timeframe trend with a Donchian Channel breakout, confirming with RSI or candlesticks before entering”
This is a very classic trend-following strategy.
Especially if you’re aiming for 10–20 pips in FX,
Confirm the direction on the daily chart
Wait for a Donchian breakout on the hourly or 15-minute chart
Confirm with RSI
Enter in the direction of the trend
This approach is considered well-suited
What is Donchian Channel?
Used for trend discovery
Detection of breakouts
Risk management
It is a technical indicator used for
Construction consists of three lines.
Upper band
The highest high over the past ○ bars (usually 20 bars)
Lower band
The lowest low over the past ○ bars
Middle line
Average of the upper and lower bands
Automatically changes with price movement.
Basic perspective
Break above the upper band
If price breaks above the upper band,
➡️ Buying pressure is strong
➡️ Possibility of an uptrend
indicates.
Break below the lower band
If price breaks below the lower band,
➡️ Selling pressure is strong
➡️ Possibility of a downtrend
indicates.
Important things about breakouts
However, “just breakout = enter immediately” is not the suggestion
emphasized in the video.
As a method of confirmation
Wait for candlestick confirmation
Engulfing
Candles with strong bodies and short wicks
It is important to confirm the breakout with such signals.
Can also be used to gauge volatility
When the channel width is wide
Volatility is high
The market is moving a lot
When the channel width is narrow
Volatility is low
Ranging market
Energy is accumulating
In other words,
It becomes easier to spot markets that are about to move
How to judge the trend
First, look at the higher timeframes like daily.
Uptrend
Price moving along the upper band
Breakouts occur repeatedly upward
Downtrend
Price moving along the lower band
Breakouts occur repeatedly downward
Even just this gives you a sense of the major trend.
Practices introduced in the video
① Confirm direction on the higher timeframe
Daily is recommended.
First
Is it an uptrend
Is it a downtrend
to confirm.
② Wait for a break on the entry timeframe
For example
Upper band break → buy candidate
Lower band break → sell candidate
to look for
③ Confirm with other evidence
In the video
RSI
VWAP
Engulfing
Strong candlestick
and other corroboration is recommended
④ Enter
Enter in the breakout direction (trend-following)
⑤ Stop loss
Set between the breakout line and the middle line
Example
In a buy scenario
Break above the upper band
Stop slightly below the upper band
That is the concept
⑥ Profit target
At minimum
Aim for a reward-to-risk ratio of 1:1.5
as a target
Example
Loss of 10 pips
Take profit at 15 pips or more
Indicators that fit well
In the video, especially
Moving Averages (MA)
RSI
VWAP
as a combination is recommended.
For example
MA is sloping upward
Donchian breakout above
RSI is also strong
then the entry reliability increases
About the settings
Generally
20 periods is standard
Shorter (10–15, etc.)
Advantages
More signals
Disadvantages
More false signals
Longer (30–55, etc.)
Advantages
Higher reliability
Disadvantages
Entries occur later
That’s all
If you’re interested, trying it out for verification might be good
The method I am currently practicing
(I have also added a currency-strength filter here)
★★ Steady trading of +10 pips per day (1–2 hours per day) ★★
I learned two techniques from a real pro trader (mentor) and refined them,
added logic that clarifies the entry points
not “to win” but “to earn” trading methodology
trade with the expectation of going long in high-probability up moves
The mindset of overseas pro traders (legendary investors Buffett and Soros)
https://www.gogojungle.co.jp/tools/ebooks/76385
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