Keltner Channel (Keltner bands) – is a classical indicator of the technical analysis designed by Chester Keltner in 1960.
In this strategy Keltner channels are used to indicate market volatility. The channels are set with the help of the moving average (10), multiplied by the value of the ATR range in order to determine the lower and upper limits of the Keltner channel. ATR (Average true range) is used to gauge volatility of the trading instrument.
In order to use this strategy, you shall download the indicator Keltner Channel, which will automatically draw the channels. Change the period of the moving average from 10 to 40. When the indicator is downloaded, file it in: Trading terminal -> Experts -> indicators The pairs used for trading are: EUR/USD, GBP/USD, USD/CHF.
Time frame H4 is used for trading.
Take profit amounts to 65 points.
Stop-loss amounts to 35 points.
Buy position can be opened at the moment when the price breaks out the upper limit of the Keltner channel (figure 1).
Sell positions can be opened at the moment when the price breaks out the lower limit of the Keltner channel. (Figure 2)