Fibonacci channel trading forex Keltner Channel is a moving average band indicator whose upper and lower bands adapt to changes in volatility by using the average true range. The Keltner Channel is used to signal possible price breakouts, show trend, and give overbought and oversold readings.
A chart of gold futures illustrates a Keltner Channel with a 20-day moving average and an average true range multiplier of 1. There are numerous, sometimes contradictory, ways to interpret the Keltner Channel. The first method is price breakouts outside of the Keltner Channel. Keltner Channel Possible Buy Signal When price closes above the upper band, buy. Keltner Channel Possible Sell Signal When price closes below the lower band, sell. Keltner Channels are sometimes interpreted the opposite way.