We are glad to provide you the indicator called Keltner Channels which was created as a result of combination of Moving Average and Average True Range.
It is placed in the section Indicators – "Channel building"
And it looks as follows:
The Keltner Channels indicator comprises 3 lines which are constantly follow the price. Its central line is also the line of the Moving Average indicator, it is specified in indicator parameters.
Lines at the edges of the Keltner Channels indicator which actually also represent the channel or "envelope" always located from the central line of the channel at distance which depends on the size of ATR for a certain period of time. The size of the ATR indicator depends on calculation of average value of volatility for some time.
It is possible to trade on this indicator like that:
To use for an entrance on a trend, and to perform an entrance only when the price punches the upper or lower bound of the Keltner Channels indicator, as shown at the pic below.
It is also possible to trade from border to border of the channel, but here it is desirable to set very small stops and not to hold the position for long.
The Keltner Channels indicator can be used in combination with oscillators which show levels of a overbuy and oversell which will reduce the number of unprofitable transactions. We wish you high profit.