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The Keltner channel is an indicator used in the technical analysis. It was designed by Chester W. Keltner and was published in his book in the 1960’s.
Despite being quite old, the Keltner channel is a respectable and one of the popular indicators in the forex markets, among others. Typically, the Keltner channel falls into the category of bands. Bands in technical analysis are a set of indicators which have an upper and a lower range.
Some of the common examples of bands in technical analysis include the Bollinger bands, Envelopes, Donchian channels to name a few. The Keltner channel is unique from most of the other band indicators.
Traders use bands, both as a breakout indicator as well as to outline the trends in prices. At times, bands can also indicate potential overbought and oversold levels.
How is the Keltner Channel Constructed?
It always helps to understand how an indicator works even though many are automatic and t...
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