Keltner Channels

The Keltner Channels indicator plots a volatility-based channel around price: a 20-period EMA centerline with upper and lower bands offset by 2 times the 10-period average true range. Because the offset is denominated in ATR, a band touch always carries the same meaning — price has moved a long way relative to its own recent true range. The build follows the standard modern ATR-based formula with its usual EMA 20, ATR 10, and multiplier 2 defaults, plotting the Basis, Upper, and Lower lines with a channel fill between the bands.

How to Trade the Keltner Channels?

• Rising Basis with price between Basis and Upper band: a healthy uptrend; pullbacks into the Basis are the conventional continuation zone.
• Price walking the Upper band: persistent contact on the trend side reads as strength rather than overextension; mirror it for the Lower band in downtrends.
• Close beyond a band while the Basis is flat: stretch without trend backing — the condition mean-reversion traders fade back toward the centerline.
• Channel width: widening accompanies a developing trend; tightening marks compression that often precedes expansion.

Anchor every read to the Basis slope: the same band touch means opposite things in trending and ranging tape.

Keltner Channels Settings

• EMA Length (default 20): bars in the exponential moving average that forms the Basis.
• ATR Length (default 10): lookback for the Average True Range that sets band distance.
• Multiplier (default 2): ATR multiple offsetting the Upper and Lower bands — higher for fewer, more selective touches.
• Source (default close): price series used to compute the Basis line.

Frequently Asked Questions

How are Keltner Channels different from Bollinger Bands?

Both wrap price in bands around a moving average, but Keltner Channels set width with ATR while Bollinger Bands use standard deviation. ATR is smoother, so this channel expands and contracts more gradually and price tags it more often.

What are the best settings for Keltner Channels?

The EMA 20 / ATR 10 / multiplier 2 configuration is the widely used modern standard on any timeframe. Raise the Multiplier or EMA Length when touches come too frequently to be informative; shorten them when the channel lags the swings you trade.

What alerts does this build include?

Upper Band Crossover fires when the close crosses above the Upper band, and Lower Band Crossunder fires when it crosses below the Lower band — both flagging movement that is large relative to recent true range.