Keltner Channels from Typical Price and Daily Range

Summary

The document describes the classic Keltner Channel indicator, attributed to Chester Keltner and dated to 1960. It explains that the channel has a central moving average of typical prices, calculated from the high, low, and close, with upper and lower boundaries formed by adding and subtracting an average daily high-to-low range.

The stated defaults use a 10-day simple moving average and typical prices. The description characterizes the channel as a volatility-based indicator and notes its visual resemblance to Bollinger Bands, but does not provide trading rules, performance evidence, or a comparison of the two methods. The channel’s behavior therefore depends on the selected moving-average settings and price-range calculation; the document does not specify how to use it for entries, exits, or risk management.

Key ideas

• The Keltner Channel uses a moving average of typical prices as its center line.
• Its outer bands are created by adding and subtracting an average daily high-to-low range.
• The described default moving-average period is 10 days, using a simple average of typical prices.
• The document explains the indicator’s construction but gives no trading signals or performance analysis.

Tags

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