Donchian Forecast

Donchian Forecast – multi-timeframe Donchian/ATR bias with ADX regime blending

Donchian Forecast is a multi-timeframe bias tool that turns classic Donchian channels into a normalized trend/mean-reversion “forecast” and a single bias value in [-100%, +100%].
It projects a short polyline path from the current price and shows how that path adapts when the market shifts from ranging to trending (via ADX).

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Concept

1. Donchian position → direction

For each timeframe, the script measures where price sits inside its Donchian channel:

-1 = near channel low
0 = middle
+1 = near channel high
This Donchian position is multiplied by ATR to create a **price delta** (how far the forecast moves from current price).

2. Local behavior: trend vs mean-reversion around Donchian

The indicator treats the edges vs middle of the Donchian channel differently:

* By default, edges behave more “trend-like”, middle more “mean-reverting”.
* If you enable the reversed option, this logic flips (edges = mean-reverting, middle = trend-
like).
* This “local” behavior is controlled smoothly by the absolute Donchian position |pos| (not by hard zone switches).

3. Global ADX modulation (regime aware)

ADX is mapped from your chosen low → high thresholds into a signed factor in [-1, +1]:

* ADX ≤ low → -1 (fully reversed behavior, more range/mean-reversion oriented)
* ADX ≥ high → +1 (fully normal behavior, more trend oriented)
* Values in between create a **smooth transition**.
* This global factor can:

* Keep the local behavior as is (trending regime),
* Flip it (range regime), or
* Neutralize it (indecisive regime).

4. Multi-timeframe aggregation (1x–12x chart timeframe)

* The script repeats the same logic across 12 horizons:

* 1x = chart timeframe
* 2x..12x = multiples of the chart timeframe (e.g., 5m → 10m, 15m, …; 1h → 2h, 3h, …).
* For each horizon it builds:

* Donchian position
* ATR-scaled delta (in price units)
* Locally + globally blended delta (after Donchian + ADX logic).
* These blended deltas are ATR-weighted and summed into a single bias in [-1, +1], which is then shown as Bias % in the on-chart table.

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### What you see on the chart

* Forecast polyline

* Starting at the current close, the indicator draws a short chain of **up to 12 segments**:

* Segment 1: from current price → 1x projection
* Segment 2: 1x → 2x projection
* … up to 12x.
* Each segment is:

* Green when its blended delta is ≥ 0 (upward bias)
* Red when its blended delta is < 0 (downward bias)
* This is not future price, but a synthetic path showing how the Donchian/ATR/ADX model “expects” price to drift across multiple horizons.

* Bias table (top-center)

* `Bias: X.Y%`

* > 0% (green) → net upward bias across horizons
* < 0% (red) → net downward bias
* Magnitude (e.g., ±70–100%) ≈ strength of the directional skew.
* `ADX:` current ADX value (from your DMI settings).
* `ADXBlend:` the signed ADX factor in [-1, +1]:

* +1 ≈ fully “trend-interpretation” of Donchian behavior
* 0 ≈ neutral / mixed regime
* -1 ≈ fully “reversed/mean-reversion interpretation”

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Inputs & settings

Core Donchian / ATR

* Donchian Length – lookback for Donchian high/low on each horizon.
* Price Source – input series used for position inside the Donchian channel (default: close).
* ATR Length – ATR lookback for all horizons.
* ATR Multiplier – scales the size of each forecast step in price units (higher = longer segments / more aggressive forecast).

*Local behavior at high ADX

* Reversed local blend at high ADX?

* Off (default) – edges behave more trend-like, middle more mean-reverting.
* On – flips that logic (edges more mean-reverting, middle more trend-like).
* The actual effect is always modulated by the global ADX factor, so you can experiment with how the regime logic feels in different markets.

Global ADX blending

* DMI DI Length – period for the DI+ and DI- components.
* ADX Smoothing – smoothing length for ADX.
* ADX low (mean-rev zone) – below this level, the global factor pushes behavior toward reversal/range logic .
* ADX high (trend zone) – above this level, the global factor pushes behavior toward **trend logic**.
* Values between low and high create a smooth blend rather than a hard on/off switch.

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How to use it (examples)

* Directional bias dashboard

* Use the Bias % as a compact summary of multi-horizon Donchian/ATR/ADX conditions:

* Consider only trades aligned with the sign of Bias (e.g., longs only when Bias > 0).
* Use the magnitude to filter for **strong vs weak** directional contexts.

* Regime-aware context

* Watch ADX and ADXBlend:

* High ADX & ADXBlend ≈ +1 → favor trend-continuation ideas.
* Low ADX & ADXBlend ≈ -1 → favor range/mean-reversion ideas.
* Around 0 → mixed/transition regimes; forecasts will be more muted.

* Visual sanity check for systems

* Overlay Donchian Forecast on your usual entries/exits to see:

* When your system trades **with** the multi-TF Donchian bias.
* When it trades **against** it (possible fade setups or no-trade zones).

This script does not generate entry or exit signals by itself. It is a contextual/forecast tool meant to sit on top of your own trading logic.

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Notes

* Works on most symbols and timeframes; higher-timeframe multiples are built from the chart timeframe.
* The forecast line is a model-based projection, not a prediction or guarantee of future price.
* Always combine this with your own risk management, testing, and judgement. This is for educational and analytical purposes only and is not financial advice.