Introduction to the Keltner ATR Bands Indicator
The Keltner ATR Bands Indicator is a forex trading indicator that measures the highs and lows of the recent price range and forecasts the length of upcoming market momentums. It displays the price channel reflecting a possible range of the price movements so that forex traders can set a target of their potential profit targets. The Keltner ATR Bands also helps to avoid bad trades or trades offering less margin than your potential loss. You will get the best results trading with the Keltner ATR Bands during sideways market conditions.
The Keltner ATR Bands Indicator fits all kinds of timeframes and currency pairs. It is displayed in a separate window placed just below the main trading chart. The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
How does it work? How to apply in trading?
Trading Rules Explanation
The Keltner ATR Bands applies a combination of a 50-day period Keltner MA and ATR (3.75 multiplied factor) in order to predict the future market ranges. The indicator has been effective because it has been proved that price often respects the areas outlined by the indicator as short-term support/resistances. In other words, there is a high probability that the price will react at the touch of the upper or lower Keltner ATR Band. These levels often turnouts as solid swing areas of the market.
Follow these steps for a long trade:
- Price hits the lower Keltner ATR Band
- A bullish price action takes place
- Price swings higher from recent low swing
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last low point of the market
- Take profit or exit trade whenever the price reaches upper Keltner ATR Band
Follow these steps for a short trade:
- Price hits the upper Keltner ATR Band
- A bearish price action takes place
- Price swings lower from recent high swing
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last high point of the market
- Take profit or exit trade whenever the price reaches lower Keltner ATR Band
As always, to achieve good results, remember about proper money management. To be a profitable trader you need to master discipline, emotions, and psychology. It is crucial to know when to trade, but also when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility conditions, beyond major sessions, exotic currency pairs, wider spread, etc.
How to set up the Keltner ATR Bands indicator in MT4?
Download the Keltner ATR Bands.rar archive at the bottom of this post, unpack it, then copy and paste the Keltner ATR Bands.ex4 or Keltner ATR Bands.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The Keltner ATR Bands indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
Keltner ATR Bands Indicator Free Download
To download the Keltner ATR Bands Indicator for Metatrader 4 (MT4) for free just click the button below: