Introduction to the Keltner Channel Indicator
The Keltner Channel Indicator is named after Chester Keltner who first introduced his indicator in his 1960 book “How to make money in Commodities“. The original indicator was based on the 10-period moving average, and this one can be set to both simple moving average and exponential moving average. The Keltner Channel indicator consists of price envelopes or bands that are located above and below the moving average by means of multiplying its value by the value of the Average True Range (ATR). These channels are very interesting because they brilliantly join together two gauges: moving average and ATR.
The Keltner Channel Indicator fits all kinds of timeframes and currency pairs. It is displayed directly on 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. Additional options are the following: if you wish to see the middle line or not, if you wish to see bars colored on a slope (bars or candles) additional Heiken Ashi prices, and some more features.
Example trade with the Keltner Channel Indicator
Below is the screenshot of an example trade with the Keltner Channel Indicator.
The middle line of the Keltner Channel is blue when the trend-momentum is bullish and pink when the trend-momentum is bearish. In the above example, the Keltner Channel switched from bearish to bullish. We took the trade at the triggering candle of that change. Another opportunity to enter a trade was the moment when the price dropped below the middle line of the Kelter Channel but it remained blue.
How to set up the Keltner Channel indicator in MetaTrader (MT5)?
Download the Keltner Channel.rar archive at the bottom of this post, unpack it, then copy and paste the Keltner Channel.ex5 or Keltner Channel.mq5 indicator files into the MQL5 folder of the Metatrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 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. A good forex indicator will most probably enhance your chance of success. Nonetheless, 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. Don’t forget that we still have more great free forex indicators to try.
Download Free Forex MT5 Keltner Channel Indicator
To download the Keltner Channel Indicator for Metatrader 5 (MT5) for free just click the button below: