Things to remember about the Donchian Channel strategy
By this stage, you might be considering incorporating the Donchian Channel strategy into your own trading. If that is the case, then you will quickly find out whether or not it fits with your individual style.
However, you should always bear in mind that creating channels is simply a different way to visualise an asset’s past price performance – there are no guarantees that trends will continue along the same lines. Therefore, you should always stick to your trading budget and not assume you are exposed to less risk because you are using a strategy.
If you want to try out the Donchian Channel strategy without risking any capital, then you can make use of a demo account with CAPEX. This will allow you to observe the Donchian Channels on real market prices and test out a few trades using the strategy.
Finally, remember that trading platforms offer you numerous tools – such as stop/loss or take/profit orders, which can help you mitigate losses if a position turns against you.
Conclusion – Trade CFDs and learn strategies at CAPEX
The Donchian Channel strategy is a popular alternative to the Bollinger Band strategy and has been put to good use by many traders over the years. Its longevity – having been developed in the 1950s – is testament to its effectiveness and versatility.
Of course, no strategy is foolproof and traders often rely on more than one such technique to improve their accuracy. It’s also worth bearing in mind that it takes practice to get a feel for a strategy and when it is likely to be reliable and when things look to be outside of its scope.
Whether you plan to trade forex, cryptocurrency, stocks or any other asset, the market-leading trading platforms offered by CAPEX allow you to implement just about any trading strategy you can think of.