Highest High / Lowest Low

The mathematics defines an envelope of values by using the Highest High or the Lowest Low of the Last 'n' Periods.

Study Type: Stand-alone

Description

The rules generally followed for this study are:

• enter the market when one of the bands is penetrated. This indicates a possible start of a trend.
• exit and reverse the position when the opposite band is penetrated.

Another rule you may want to apply is the Donchian's rule, which states:

• cover short positions and go long whenever the price exceeds the high of the previous four weeks.
• reverse long positions and go short whenever the price exceeds the low of the previous four weeks.

Parameters

• Period High: (10) - The number of bars in a chart. If the chart displays daily data, then period denotes days; in weekly charts, the period will stand for weeks, and so on. If the default length of the study is chosen (10), the study will return the highest of the high price values over the previous 20 bars.
• Period Low: (10) - The number of bars in a chart. If the chart displays daily data, then period denotes days; in weekly charts, the period will stand for weeks, and so on. If the default length of the study is chosen (10), the study will return the lowest of the low price values over the previous 10 bars.