(c) LuxAlgo
The Donchian MA Bands script is a complete trend indicator derived from the popular Donchian channel indicator as well as various customizable moving averages to estimate trend direction and build support/resistance levels & zones.
The indicator outputs various elements, the main ones being a lower dynamic zone (blue by default), an upper dynamic zone (in orange by default), and one support and resistance level/zone (red/green by default).
A prominent lower zone is indicative of an uptrend, while a prominent upper zone is indicative of a downtrend. These zones can be used as support/resistance as well.Support/resistance zones and levels can be used using a breakout methodology or to determine price bounced if a level was tested multiple times.
The indicator contains various modes affecting the output of the indicator, described below.
-Clouds return one upper/lower dynamic zone and look/act similarly to a trailing stop. Price over the lower zone is indicative of an uptrend, and price under the upper zone is indicative of a downtrend.
-The upper band mode returns a dynamic zone closer to prices during an uptrend, and farther away during a downtrend.
This band can act as a support during uptrends.
-The lower band mode returns a dynamic zone closer to prices during an uptrend, and farther away during a downtrend.
This band can act as a resistance during downtrends.
-Bands return both upper and lower zones, the zones are more apparent depending on the price trend direction, with uptrends being indicated by a more visible lower zone, and downtrends being indicated by a more visible upper zone.
Breakout dots are highlighted when price breakout the indicator displayed extremities, and can be indicative of a confirmed trend reversal.
enjoy !
