What Keltner Channels shows
An EMA with bands set by the Average True Range instead of standard deviation, so they are smoother than Bollinger Bands.
Indicator guide · Bands and channels
Keltner Channels: what it shows, settings and how to read it.
An EMA with bands set by the Average True Range instead of standard deviation, so they are smoother than Bollinger Bands.
How it is calculated
The middle line is a 20-period EMA. The bands are placed a multiple of the Average True Range (ATR) above and below it.
Usual settings
EMA 20 with bands at 2 x ATR (10 or 20 periods).
How traders read it
A close outside the channel shows unusual strength. Bollinger Bands moving inside the Keltner Channel is the well-known "squeeze".
Where it fails
Breakouts fail often when volume is low.
What to combine it with
Bollinger Bands for the squeeze setup, and volume to confirm a breakout.
Try Keltner Channels on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Keltner Channels. Click its name on the chart to change the settings. It is free for every member.
More in "Bands and channels": Bollinger Bands · Donchian Channels · Ichimoku · All 25 indicators
Questions
Frequently asked questions
What is the Keltner Channels indicator?
An EMA with bands set by the Average True Range instead of standard deviation, so they are smoother than Bollinger Bands.
What are the best settings for Keltner Channels?
The usual settings are: EMA 20 with bands at 2 x ATR (10 or 20 periods). No setting is best in every market, so test a change on past data before relying on it.
Is Keltner Channels reliable on its own?
No single indicator is. Breakouts fail often when volume is low. Most traders use it together with: Bollinger Bands for the squeeze setup, and volume to confirm a breakout.
How do I add Keltner Channels to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Keltner Channels. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns