So, which situations should you be more inclined to use one as opposed to the other? In the remainder of this article, alongside discussing the key similarities and differences between the two indicators, we’ll discuss those conditions in detail. In cases where the market volatility is high and/or the trader has moderate to high-risk tolerance, Bollinger Bands will prove to be a better trading indicator.īollinger Bands are dynamic, react faster, and are agile to use for high volatility assets.īut the opposite is also true: there are situations where you should choose Donchian Channels over Bollinger Bands. It depends on the nature of the market one is trading in, the asset and its volatility, the trading strategy, and the risk tolerance of the trader. But is one indicator better than the other? While Bollinger Bands are useful trading indicators that are widely known and used by traders in all types of security markets (such as – stocks, Forex, and cryptocurrencies), Donchian Channels can offer comparatively more reliable trading opportunities depending on the trading scenario and your trading strategy. At face value, Donchian Channels looks a lot like a Bollinger Bands and may be perceived as operating identically to it.
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