Donchian Channels plot the highest high and lowest low over a specified period, forming a simple but effective volatility envelope and breakout system that powered the legendary Turtle Trading strategy. They are widely used in forex and crypto for trend-following breakout strategies. Compare Donchian Channels with Bollinger Bands and Keltner Channels in our indicator guide library.
Upper Channel = highest high over N periods. Lower Channel = lowest low over N periods. Middle Line = (Upper + Lower) / 2. Default period is 20. Price breaking above the upper channel signals a potential new uptrend; breaking below the lower channel signals a potential downtrend.
The Mass Index identifies potential trend reversals by measuring the narrowing and widening of the range between high and low prices, generating a "reversal bulge" signal when the range first expands then contracts. It is a unique contrarian tool for <a href="/market/stocks" class="text-primary hover:underline">stock</a> and <a href="/market/forex" class="text-primary hover:underline">forex</a> traders. Combine Mass Index reversal signals with momentum tools from our <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a> for higher-probability entries.
The Ulcer Index measures downside volatility by calculating the depth and duration of drawdowns from recent highs, providing a risk metric that focuses exclusively on the pain investors care about most. It was created by Peter Martin specifically for evaluating <a href="/market/stocks" class="text-primary hover:underline">stock</a> fund performance. Incorporate the Ulcer Index into your risk management alongside tools from our <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a> to protect capital during volatile markets.
Bollinger Bands plot a moving average with upper and lower bands set at 2 standard deviations, expanding during high volatility and contracting during low volatility to create actionable squeeze and breakout signals. The Bollinger Squeeze is especially powerful when combined with <a href="/academy/indicators/keltner-channels" class="text-primary hover:underline">Keltner Channels</a> in the TTM Squeeze setup, a favourite of professional traders. Pair Bollinger Bands with the <a href="/academy/indicators/rsi" class="text-primary hover:underline">RSI</a> to filter false signals and confirm <a href="/guides/trade-breakouts" class="text-primary hover:underline">breakout entries</a>. Set them up on <a href="/tools/platforms/tradingview" class="text-primary hover:underline">TradingView</a> for real-time alerts and multi-timeframe analysis.
Chaikin Volatility measures the rate of change of the difference between high and low prices, providing a unique view of how the trading range is expanding or contracting. Unlike <a href="/academy/indicators/atr" class="text-primary hover:underline">ATR</a>, which smooths absolute range, Chaikin Volatility focuses on the acceleration of range changes. It is useful in <a href="/market/stocks" class="text-primary hover:underline">stock</a> and <a href="/market/forex" class="text-primary hover:underline">forex</a> markets and can be explored alongside other volatility tools in our <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a>.