Introduction to the Keltner Channel Indicator
The Keltner Channel indicator is a classical forex trading technical indicator. It was originally introduced by Chester W. Keltner in 1960 in his book “How To Make Money in Commodities”.
The core of that indicator are two bands above and below the middle moving average, the width of which is determined as a fraction of the average price change for the period.
The Keltner Channel indicator helps traders to determine current market trend, and also provides overbought-oversold levels during a flat trend.
The indicator is displayed directly on the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
The formula for the Keltner Channel indicator:
The calculations of the Keltner Channel indicator are based on the following formula:
The Upper Band: EMA + (Multiplier * ATR)
The Lower Band: EMA – (Multiplier * ATR)
The Middle Band: EMA
As you can see, it uses data from the EMA (Exponential Moving Average) and the ATR (Average True Range) to calculate its bands.
How to set up the Keltner Channel indicator in MT4?
Copy and paste the keltner-channel.mq4 or keltner-channel.ex4 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, that 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 Channel 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 Channel Indicator Free Download
To download the Keltner Channel Indicator for Metatrader 4 (MT4) for free just click the button below: