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Bryant,
The Donchian Bounce is a simple pattern I spoke
about in an earlier post that I had observed in my daytrading a few years back.
Simple reversal bar off a flat channel (and the
reversal candle must "touch" the channel), using a lookback of 34 and offset of
-2. The flattening, in essence, shows potential price reversal, and
staying flat for at least 2 intervals gives added weight to the reversal bar.
Other candle patterns help in the interpretation here. For instance, a reversal
Doji (or hammer in this case) is even better confirmation.
As for a system based on this, IMHO the entry
rate is pretty decent, but the exit target is "fuzzy". Today, you'd see
that the "midline" was a decent target before reversing (GIF
attached).
I once tried combining this with a shorter
lookback channel to confirm the breakout in the opposite direction, but overall,
I believe this to be a descretionary tool.
Best regards,
Gene Pope
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
M.
Simms
To: <A title=gene@xxxxxxxxxxxxx
href="mailto:gene@xxxxxxxxxxxxx";>gene@xxxxxxxxxxxxx
Sent: Tuesday, April 09, 2002 1:43
PM
Subject: FW: [RT] Donchian Bounce
An interesting
study would be to determine what % of Donkey Bounces result in an eventual
continuation in the same direction......
i.e. temp
bounce, then back down in this case.
<FONT face=Tahoma
size=2>-----Original Message-----From: Bryant
[mailto:bulldog483@xxxxxxxxxxx]Sent: Tuesday, April 09, 2002 12:08
PMTo: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxxSubject:
Re: [RT] Donchian Bounce
Never heard of that pattern , I have read everything I could find on
Donchian. Was this part of his description of the channels? Could you briefly
describe the set-up. Looks like it is the automatic rally off the
decline.
Thanks
BT
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