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Keltner channel

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If you are looking for daily success in your trading life, it is better to go for the strategy determined by the Keltner indicator. Due to the constantly changing conditions of the forex market, the Keltner channel system can help you make more profit and you can use this method for digital currencies.

In this article, we want to teach you how to use Keltner’s business strategy step by step. We believe that if you succeed in learning this strategy, you will surely succeed in your career. Once you learn Keltner’s foundation, you will be able to make better and more confident business decisions.

Of course, the indicators of these strategies must also be compatible with the technical indicators. Now let’s find out how to do business with Keltner channels and how these channels will help you change the way you do business.


How to trade with Keltner channel?


The Keltner channel is a technical indicator that is in the category of “envelope indicators”. In fact, these channels are considered a type of dynamic channel that includes the price range in a specific range.

Keltner channels are a volatile indicator that includes a defined average on which the minimum and maximum limits are set.

These channels help you measure the volatility of the market, evaluate its current trend, and also show you the development of various trading activities, pullbacks and reversals. You can also enter or exit a commercial activity with the help of Keltner channels.

The Keltner channel created by you basically provides you with an envelope index of the price, the mechanism of which is very similar to the Bollinger Bands index. The difference between these two indicators is that Keltner channels work based on ATR or the correct average interval; While Bollinger Bands is based on the principle of standard deviation.


If you want to get more technical information about these channels and understand the mathematical principles of the volatility index, you can refer to the following formula:


Middle band = defined average value of mobility in 20 periods

Upper envelope = defined average value of mobility in 20 periods + ATR reproduction value

Lower envelope = defined average value of mobility in 20 periods + ATR reproduction value


How to interpret Keltner Volatility Index


In different time periods, when the price reaches the upper envelope part and the upper band also shows an upward movement, this indicates a strong uptrend. In other words, the price is continuously advancing along the upper bar.


Keltner canal system


When Keltner bands are flat and moving horizontally, it means price stability in the market. In fact, the prices are currently moving between the upper and lower envelope without leaving a fixed pattern.


How to trade using Keltner channels


Another national commercial application that can originate from the Keltner channel indicator is the possibility of starting a change in the direction of the curve movement. The Keltner channel indicator is a suitable source of information to detect the downward movement of the chart or market retreat.


Now, before giving any additional explanation about this, take a pen and paper and write down the rules of the screening strategy. In this article, we want to use the Keltner system as a buyer.


Keltner canal system


The forex market has a natural rhythm, which will lead to the fluctuating movement of the market towards greater stability or vice versa. But in any case, you are still facing some types of fluctuations that disturb the stability of the market. This is where the Kernel system comes in to help you become a successful trader.

Keltner’s channel horn is considered a very suitable tool. But it is optimized and its efficiency increases when it is combined with other indicators.

Since the Keltner channel indicator is slow in nature, we can use a secondary tool such as the ADX indicator to gain more influence. Together, these two indicators help us to detect a sharp decline in the market.

Using ADX we can also measure the strength of the market failure. Generally, an ADX reading above the 20 level is the beginning of an up/down trend. Any reading below 20 signals a consolidation period.

The ADX should continue to show that the market is moving forward strongly. When the Keltner channel is used together with the ADX indicator, you can also accurately identify the trade stop trend.


Determine the trading range of the markets using the Keltner channel


You can use the difference in how the Keltner channel system is used in combination with other technical indicators. Prices actually never reach the upper and lower bands and are always moving between the upper and lower envelopes. When the market is volatile and volatile, you will see prices drop all at once. But mainly in the stable market, the prices are in the middle band.

Note that when there is instability in the behavior of the market, you must use another technical indicator in addition to Keltner so that you can make a correct assessment of the market and identify profitable sectors.

Since forex spends most of its time, about 70% of its time, on maintaining market stability, it is necessary to have a suitable trading strategy for trading in this market.

For a wide range of trading activities, we like to use the Keltner channel in combination with an RSI indicator


We are of two eras. When combining these two indicators, we can determine the high and low points of the chart with a more accurate calculation and reduce our error percentage.

In the following, we will mention some rules of using Keltner that will lead you to make the best business decisions:


Keltner envelopes should be flat and linear to maintain stability

Prices should move below the middle band level

Stop loss protection can hide on the other side of Keltner’s band.

To achieve long-term profit in the market, it is necessary for your RSI to reach 90


Trading retreats using Keltner


Successful business marketing can only be achieved if there is a strong trend in the market. Using the Keltner channel indicator, we can examine how the price moves around the upper and lower envelopes, so that we can recognize the behavior of the market and the strength of its trend.

As you can see, when the prices approach one of the two bands or crawl towards one of them, we will see a strong trend in the market.

But in general, for better timing of trading activities, we can use the Stochastic RSI index in combination with the Keltner index to improve the impact of our evaluation.