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Keltner Channel Indicator

Apply a Keltner Channel Indicator

The Keltner Channel indicator is sensitive to volatility, and plots an "envelope" of two bands above and below the middle line, which represents a 20-period Exponential Moving Average (EMA). The upper and lower bands define the area inside of which the price should generally fall. The price crossing or floating towards these lines could indicate a trading opportunity.

keltner912.gif

 

The Keltner Channel bands are calculated as follows:

Middle Line = EMA(TP)

Top Line = EMA(TP + Dev x TR)

Bottom Line = EMA(TP - Dev x TR)

Where:

EMA - exponential moving average

TP = typical price

TR - trade range equals high - low

Dev — the deviation factor.

To overlay a Keltner Channel Indicator

  1. From within a chart, from the Edit menu select Studies.
  2. Choose Keltner Channel and Add the study.
  3. Complete parameters as necessary.

Note that you can increase the thickness and color of the indicator lines by right-clicking a line and using the edit menu to select Change Indicator Thickness or Change Indicator Color. A thickness of "1" is the thinnest; 4 is the thickest.

Important Disclosures