Keltner Channels: EMA Centerline and ATR-Based Bands

Summary

This short indicator reference defines a Keltner Channel using high, low, and close price data alongside three parameters: the moving-average period, the ATR period, and a multiplier. It first calculates an average of true range over the selected ATR period. The upper and lower bands are then formed by adding and subtracting the multiplied range value from an exponential moving average of closing prices.

The description provides the calculation inputs and pseudocode, but no interpretation of band crossings, trading rules, parameter recommendations, backtest results, or evidence that the indicator is profitable. It therefore explains how to construct the channel rather than how to trade it. Results will depend on the chosen periods and multiplier, which the source leaves unspecified.

Key ideas

• The channel uses high, low, and close prices with three configurable parameters.
• Its centerline is an exponential moving average of closing prices.
• The band width is based on an average true range multiplied by a selected factor.
• The upper and lower bands sit symmetrically around the centerline.
• The reference supplies no trade signals, parameter guidance, or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.