Keltner Channels
Keltner Channels are a technical analysis tool used to identify price trends and volatility in the financial markets. The channels are based on the Average True Range (ATR) indicator, which measures the degree of price volatility. The Keltner Channels are composed of three lines: an upper line, a lower line, and a midline. The upper and lower lines are plotted a certain number of ATR units above and below the midline, respectively. The midline is usually a 20-period exponential moving average (EMA) of the closing prices. The Keltner Channels are used to identify potential breakouts and reversals in the markets.
History of Keltner Channels
Keltner Channels were developed by Chester Keltner in the 1960s. Keltner was a commodities trader who developed the channels as a way to identify potential breakouts and reversals in the markets. Keltner Channels are based on the Average True Range (ATR) indicator, which was developed by J. Welles Wilder in 1978. The ATR is used to measure the degree of price volatility in the markets. Keltner Channels are used by traders to identify potential breakouts and reversals in the markets.
Comparison Table
| Indicator | Upper Line | Lower Line | Midline |
|---|---|---|---|
| Keltner Channels | ATR units above midline | ATR units below midline | 20-period EMA of closing prices |
Summary
Keltner Channels are a technical analysis tool used to identify potential breakouts and reversals in the markets. The channels are based on the Average True Range (ATR) indicator, which measures the degree of price volatility. The Keltner Channels are composed of three lines: an upper line, a lower line, and a midline. The upper and lower lines are plotted a certain number of ATR units above and below the midline, respectively. The midline is usually a 20-period exponential moving average (EMA) of the closing prices. For more information about Keltner Channels, visit Investopedia, TradingView, and StockCharts.
See Also
- Average True Range (ATR)
- Exponential Moving Average (EMA)
- Bollinger Bands
- Donchian Channels
- Parabolic SAR
- Relative Strength Index (RSI)
- Stochastic Oscillator
- Moving Average Convergence Divergence (MACD)
- On Balance Volume (OBV)
- Price Volume Trend (PVT)
