Keltner Channel indicator

Currently, Keltner Channels are among the most common channel-type indicators. They are reflected in Chester Keltner's book How to Make Money in the Stock Market. A little later, the Keltner indicator was changed by Linda Raschke, who finalized and adapted the work program of the current exchange employees. Linda Raschke modernized and published the newest version of the fading channel and began using the Wilder range (average, true). This channel continues to exist to this day.

Keltner channels are trend indicators that represent three bars on a chart. They determine the trend and flat in the market, and also give pretty good signals for buying binary options. In appearance and characteristics, it is similar to Bollinger Bands or another channel-type indicator. The central line is formed with an interval of 20, less often - 10.

Instructions for installing indicators in MetaTrader 4 :

How to trade using the Keltner Channel indicator

Trading operations in flat

Trading operations using the Keltner Channels in a flat market are simple. If the value of an asset is close to or intersects with the upper boundary of the channel, this is a signal to open a call option. When the price approaches or crosses the lower border of the channel, there will be a signal that it is time to buy a put option. However, an exception and an excellent signal is the case in which the candle was not created completely outside the boundaries of the channel, but covers the border. In this case, the size of the candle does not play any role. This makes it possible to avoid unprofitable trades.

Trending trading operations

The Kaltenrn indicator is most often used in conjunction with a reliable indicator such as ADX, because it demonstrates the correction of trend strength .

Buy signal (call):

• The +DX segment must be located above -DX;
• The graph must cross the central Keltner line from the bottom to the top;
• ADX equals or exceeds 30.

Sell ​​signal (put):

• The segment -DX exceeds +DX;
• The graph crosses the central Keltner line from the top to the bottom;
• ADX equals or exceeds 30.

Summary

Although the indicators are approximately the same, they all have different calculation systems. The Keltner channel has some positive properties:

• A simple interpretation
• Increased sensitivity to price changes,
• Low number of false signals compared to other channel indicators.

To trade using Keltner channels, you should filter signals for binary options using higher type timeframes, which makes it possible to minimize unprofitable trades.

Download the Keltner Channel indicator

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See also:

How to install an indicator in MT4

And the ADX indicator

Binary options trading strategies