Adaptive Donchian Breakout Channel [SchizoQuant]

The indicator calculates the highest high and lowest low of a configurable Donchian channel using previously completed candles.

A confirmed close above the upper boundary establishes an initial bullish regime, while a close below the lower boundary establishes an initial bearish regime.

Pine Script®

Using completed candles prevents the current candle from shifting its own breakout boundaries and provides a consistent structural reference.

The indicator measures the closing price's normalized position within the Donchian channel and smooths this measurement using an exponential moving average.

Bullish acceptance increases as price consistently occupies the upper portion of the channel, while bearish acceptance increases as price remains near the lower portion.

These acceptance values determine how strongly the wider structural boundary influences the active reversal defense.

Pine Script®

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The defense blends shorter and longer Donchian support or resistance levels. Strong directional acceptance increases the influence of the deeper boundary, allowing additional room for countertrend fluctuations.

The indicator maintains a persistent bullish or bearish regime through its internal trend state.

- LONG: An initial bullish Donchian breakout or a confirmed bullish reversal above the adaptive bearish defense.
- SHORT: An initial bearish Donchian breakout or a confirmed bearish reversal below the adaptive bullish defense.

After the initial breakout establishes a regime, subsequent reversals use the adaptive defense boundaries rather than requiring another full Donchian breakout.

Pine Script®

The reversal buffer is calculated as a configurable fraction of the Donchian channel width, requiring additional penetration beyond the defense boundary.

Signals are generated only on confirmed candle closes. Each regime transition produces a single LONG or SHORT signal.

- Neon green: Active bullish regime and LONG signals.
- Purple: Active bearish regime and SHORT signals.
- Donchian bands: Historical breakout boundaries surrounding price.
- Adaptive defense: Dynamic reversal boundary reflecting directional acceptance.
- Channel midpoint: Optional reference for the center of the Donchian range.
- LONG / SHORT triangles: Confirmed directional regime transitions.
- Candle coloring: Visual identification of the prevailing regime.

Band-line transparency and channel-fill transparency can be adjusted independently without changing the indicator's calculations.

Users can configure the breakout lookback, fast and slow Donchian periods, acceptance smoothing, maximum defense depth, and reversal buffer.

Separate visualization settings control channel bands, midpoint, adaptive defense, signal markers, candle coloring, and band transparency.

Bullish and bearish colors are fully customizable.

Traditional Donchian breakout systems commonly rely on fixed historical highs and lows.

Adaptive Donchian Breakout Channel introduces a second layer of analysis by evaluating where price consistently closes within its channel and using that information to adjust structural reversal boundaries.

This separates initial breakout confirmation from subsequent trend management, allowing reversal thresholds to respond to changing price acceptance.

Adaptive Donchian Breakout Channel is designed for directional trend analysis, breakout confirmation, monitoring structural support and resistance, and identifying transitions between bullish and bearish market regimes.

It can be used independently as a visual trend reference or alongside other analytical tools for additional confirmation.

The indicator is reactive rather than predictive. Sideways markets may produce repeated regime changes, while wider adaptive defenses can delay reversal signals.

Defense boundaries can move as channel structure and price acceptance change, and they should not be interpreted as guaranteed support, resistance, or executable stop-loss levels.

Performance depends on market conditions, timeframe, and parameter selection.