Donchian channels were developed by Richard Donchian, the father of trend following. The two outer bands are plotted as the highest high and lowest low for a set period of time.
In the FiboDonchian, the channel is divided into 3 zones according to Fibonacci levels: 0-0.382 (Bullish Zone) 0.382-0.618 (Neutral Zone) 0.618-1(Bearish Zone)
These levels will usually act as support and resistance during trends, and will reverse depending on the direction of the trend (e.g. in an uptrend the .382 is above the .5 and during a downtrend it is below).
An option to color candles according to the trend is given, with the following logic: -During uptrends, candles will turn bullish when a new high is made and will remain in this state as long as price closes in the upper zone. Below this zone price turns neutral until a new high or low is made. -During downtrends, candles will turn bearish when a new low is made and will remain like this provided that price closes in the lower zone. Above this zone price turns neutral until a new low or high is made.
Clean. I like it. Nice color scheme too -- just tried another version of this -- its a great combination of concepts...especially when combined with Better Bollinger Bands...and the Robust Channel... price respects these channels and it helps a trader map out the probability of the next move in a clean visual way. Thanks!
Hociemocie
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@slowcoconut, thanks - robust channel is a great find to use with some of FractalTrade15's amazing stuff!!!
bilalabes
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thanks for sharing your work with the community, amazing effort and very helpful .