when the price decreases for 20 days from a high the green line will be horizontal and then start dropping conversely when the price rises from a low for 20 days the red line will be horizontal for 20 days and then start rising 
practical uses of the donchian channeldonchian channels have several applications for traders in stocks forex commodities and other markets they can help identify potential breakouts and reversals in price which are the moments when traders are called on to make strategic decisions these strategies can help you capitalize on price trends while having pre defined entry and exit points to secure gains or limit losses using the donchian channel can thus be part of a disciplined approach to managing trades the width of the area enclosed within the upper and lower lines reveals the asset s volatility a wider channel signifies high volatility and larger swings in price during the period implying the asset has a high potential for price fluctuations a narrow channel shows lower volatility meaning the asset could be more stable or is in the midst of consolidating previous gains or losses 