The top, upper line in red, is the highest price in the previous 50 trading days. The lower line in blue represents the lowest point price has reached in the last 50 trading days. The light gray line in the middle is the mid-point between the upper and lower.
Strategy 3: Counter-TrendIn contrast to the above two strategies, strategy 3 tells the trader to be short when the Donchian Channel signals long. Conversely, when the Donchian Channel tells the trader to sell, he will do the opposite and buy.