Smoothed Multi-Period Keltner Bands for Volatility-Based Stop Distance

Summary

This indicator averages upper and lower Keltner bands calculated over four lookback periods: 50, 100, 150, and 200. The difference between the averaged bands is displayed as a histogram, intended to show volatility with less abrupt variation than a single-period band. An adjustable external multiplier changes the band width, though the document does not explain how to select it or how the result should affect position size.

A companion chart plots reference levels above each bar’s high and below its low, offset by the averaged band width. The upper and lower points can be toggled independently. These plotted distances may help visualize a candidate stop buffer, but the indicator does not specify trade-entry rules, stop updates, or execution behavior. It provides no backtest, performance evidence, or guidance on asset class and timeframe; the claimed smoothing and stop-loss use should therefore be evaluated on the intended market and strategy.

Key ideas

• The indicator averages Keltner bands computed across four lookback periods to smooth their width.
• The histogram displays the distance between the averaged upper and lower bands as a volatility measure.
• An external multiplier controls the band width, but the document gives no selection method.
• The companion plot marks levels above highs and below lows at a distance equal to the averaged band width.
• The document provides no tested trading rules or performance evidence.

Tags

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