Keltner Bands Expert Advisor Setup - Setting Up Keltner Bands Expert Advisor

Keltner Bands Expert Advisor Setup - A trader can come up with an Keltner Bands Expert Advisor based on the Keltner Bands indicator explained below.

Keltner Bands Expert Advisor rules can be combined with other indicators to come up with other Expert Advisor Bots that trade using rules based on two or more indicators combined to form a system.

Keltner Channels Analysis and Keltner Channels Signals

Developed by Chester Keltner. Described in his book "How to Make Money in Commodities"

Keltner Channels are based on ATR indicator, the bands use ATR values to plot the bands lines.

These Bands form Channels which help to spot the market trends using this simple volatility channel.

Keltner Bands - Keltner Channels Expert Advisor Setup

Construction

Keltner Channels are similar to Bollinger Bands except for the fact that Bollinger Bands use standard deviation method to determine volatility & to plot the bands.

For the keltner bands instead of using the standard deviation the average true range (ATR) measure of volatility is used.

This indicator is an n number of periods exponential Moving Average of the closing price. These bands are developed by

Adding (for the upper line) and

Subtracting (for the lower line)

An (n-period simple MA of an n-period ATR) * an ATR multiplier.

Technical Analysis & How to Generate Signals

This indicator can be traded in much the same way as a Bollinger Bands.

Continuation Signals

When price moves outside the bands then a continuation of the current Forex trend is implied. A buy signal is when the channels are moving upward & sell signal is when the channels are moving downwards

Continuation Buy Sell Signals - Keltner Channels Expert Advisor Setup

Reversal Signals - Double Tops & Double Bottom Trading Patterns

Tops & Bottoms made outside the bands followed by tops and bottoms made inside the Keltner channels indicate signal for reversals in the market trend.

Reversal Signals - Keltner Bands EA Setup

Ranging Currency Markets

In ranging markets a move that originates from one Keltner channel tends to go all the way to the other channel.