Keltner Channel indicator: volatility based channel for MT5
Keltner Channel trading indicator for the MetaTrader 5 terminal - another channel indicator.
The indicator displays on the price chart of the currency pair Keltner channel, a classic technical analysis indicator developed by Chester Keltner in 1960. Bollinger Bands and Envelopes.
It uses three chart lines: the middle line is a 10-day simple moving average of "typical" ((high + low + close) / 3) prices, the upper and lower lines are obtained by adding and subtracting the moving average of the daily price range (difference of Maximum and Minimum) from the middle line. Thus, a channel based on volatility is built.
Input parameters:
- MA_Period (default = 10) - the period of the moving average (midline).
- Mode_MA (default = MODE_SMA) - type of moving average (average line).
- Price_Type (default = PRICE_TYPICAL) - price type for the moving average (midline).
The classic strategy for this indicator is to buy when closing above the upper line and sell when closing below the lower line. It seems that this entry strategy is justified enough. Exits can be applied on a very conservative stop loss - False signals are not uncommon, by a sufficiently high take profit and by crossing the price with the middle line.
Experts ForTrader.org magazine recommend using other indicators to confirm signals.