Keltner Channel

The Keltner Channel is a volatility based envelope technique based on the range of HIGH to LOW daily.

Study Type: Overlay

Description

First a coefficient named "MA_periods" is defined to hold the number of periods to be used in the moving averages required for the Keltner Channel. Then, a "typical" price is computed by summing the HIGH, LOW and CLOSE and dividing by three. "MA_typical", a simple moving average of the typical price, is then computed using the number of periods held in "MA_periods". "Diff" is the range for the day. "MA_Diff" is a moving average of "Diff", also using "MA_periods".

The "Upper" channel is calculated by adding the "MA_Typical" and "MA_Diff" together. The "Lower" channel is a subtraction of "MA_Diff from MA_Typical.

If the price breaks out of either the upper or lower band this is interpreted as a continuation signal not a reversal signal.

Parameters

• Period: (20) - The number of periods to be used in the Moving Averages.
• TP: (262)