Technical indicators have been playing important roles in the forex market since time immemorial, and are still as important today. There are many of them out there, one of which is the Keltner channels. The forex Keltner channels are trade indicators used to evaluate the current trend of a trade, spot potential trading opportunities, and provide signals based on that. The channels have upper and lower lines, and also the middle or average line, all of which are plotted using volatility and average volatility and average prices. Day traders can take advantage if the forex Keltner channels and can even develop more than a trading plan from it. Some of the strategies are
- Keltner channels calculation
- Keltner channel trend pull back strategy
- Keltner channel breakout strategy
- Keltner channel pullback and break out strategy combined
- Stochastic and Bollinger bands scalping system
For the purpose of this article, the focus will be on the Keltner channel with stochastic and Bollinger bands scalping system; how to work it for maximum benefits in the forex market.
STOCHASTIC AND BOLLINGER BANDS SCALPING SYSTEM AND THE KELTNER CHANNEL
In this trading strategy, the Keltner channel indicator is used together with the stochastic indicator, and Bollinger bands. It is suggested to use the 15-minute time frame with this strategy for any currency pair at all. Here is a description of its use for ling entry, short entry, and exit position
- LONG ENTRY:
In forex trading, long entry means buying in on an asset hoping that the price will increase at which time the asset will be sold at a higher value. To go long with the Keltner channel with stochastic and Bollinger bands scalping system, make sure the prices are outside the Keltner bands, and the stochastics outside the Bollinger band. The bands are expected to be below 35 level and crossing back up the middle of the Bollinger bands.
- SHORT ENTRY:
Short entry means selling out an asset in hopes that its price will come down before buying it back as a lesser value. To go short with this trading system, price should be outside the Keltner bands, the stochastics outside the Bollinger bands and crossing back down the middle of the Bollinger band.
- EXIT POSITION:
In either a long or short position with this strategy, it is wise to exit the position when at the middle of the band of the Keltner channel or with a fast profit target.
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