Keltner Channel
Places ATR-based envelopes around an exponential average.
Start with the input, not the story.
Direction through the centre EMA and recent range through ATR envelopes.
This channel uses the simulator's exact EMA 20 and ATR 14 calculations with bands set at ±1.5 ATR. It lets you compare three possible rules: a touch, a completed close outside, and a pullback after that close. Platform defaults can vary.
Thin trading can push price across the envelope without lasting follow-through. Set the period, multiple and close rule before reviewing examples.How traders commonly use Keltner Channel
Keltner Channels are often used to study completed closes outside a volatility envelope or pullbacks toward the centre line in a defined trend.
Combine an EMA centre line with ATR-based envelopes to frame direction and typical range.
Keep this job separate from entry timing, stop placement and position size.
A useful counterexample
A single channel breach caused by a thin-market spike can disappear into the range and says little without context.
Keltner for the envelope, ADX for regime, structure for invalidation
Each part has a different job. If two tools answer the same question, remove one and compare the result.
Frames the EMA trend estimate with ATR-scaled bands.
Labels whether the background is directional or choppy.
Provides the breakout or pullback failure point.
Follow the same order every time
- Fix the EMA period, ATR period and channel multiple.
- Wait for a candle to close and classify it as inside, outside or back inside the channel.
- Record the ADX regime without using ADX to infer direction.
- Anchor invalidation to a pre-existing swing or range boundary.
- Test outside-close and pullback-after-close observations as separate samples.
The indicator is one part of the method
These strategy pages show the market conditions, entry, stop and exit around the indicator.
Bollinger squeeze
Tests whether unusually narrow bands precede a tradable volatility expansion.
- ENTRY
- Enter at the next H1 open in the direction of the first eligible release close.
- STOP
- Place stop at the opposite side of the frozen six-bar range. Risk 0.50% equity, rounded down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 16 completed H1 bars if unresolved.
Trend pullback
Research whether shallow retracements inside an objective trend resume in its direction.
- ENTRY
- After eligibility is true, place a market order at the next H1 open when the signal candle closes beyond the highest high of the previous two pullback bars for a long, or below their lowest low for a short.
- STOP
- Place the stop 0.25 × ATR(14) beyond the pullback extreme. Size so entry-to-stop risk equals 0.50% of demo equity, rounded down to 0.01 lot; never widen the stop.
- EXIT
- Place a fixed target at 2R immediately after entry. If neither stop nor target trades first, exit at market after 24 completed H1 bars.
Volatility-targeted momentum
Scales a simple momentum signal so higher-volatility pairs do not dominate risk.
- ENTRY
- At Monday 00:00 UTC, rebalance selected pairs to inverse-60-day-volatility weights, normalised to 10% ex-ante portfolio volatility and then reduced proportionally to satisfy every cap.
- STOP
- No chart stop. Cut a pair to zero at the next daily open if its one-day loss exceeds 3 × its 60-day daily volatility; suspend all new entries for one week if estimated portfolio volatility exceeds 15%.
- EXIT
- At each weekly rebalance, exit a pair that leaves its top/bottom-two rank, loses the 2% absolute-score threshold or breaches a risk rule; otherwise resize to the new capped target weight.
Set up Keltner Channel on your platform
Match the lesson's period, price input, smoothing and candle timing. Similar names can still produce different values across feeds and platforms.
MT4
Custom code neededA faithful on-chart version needs an MQL4 implementation. Check the source note below when WickAtlas provides one.
MT4 technical analysisWickAtlas MT4 setup guideMT5
Custom code neededA faithful on-chart version needs an MQL5 implementation. Check the download note below before assuming WickAtlas provides one.
MT4 and MT5 comparisonWickAtlas MT5 setup guideTradingView
Built inAvailable in the standard TradingView indicator library. Names and default settings can differ.
TradingView indicatorsWickAtlas TradingView guide“Built in” means the standard platform library contains the underlying indicator. It does not mean its defaults or calculation match every third-party version. Compare the platforms.
Plain-language formula
The same indicator can look slightly different across platforms because the price input, smoothing and rounding may change. Note your settings before comparing two charts.
Where it may help
Trend continuation, volatility expansion and squeeze comparisons.
Where it struggles
Low-liquidity spikes and over-optimised multiples.
What to pair it with
Pair it with something that answers a different question, such as volatility or market direction. Try the indicator on its own before adding more tools.
The shortcut to avoid
Assuming a channel break is significant without a close or regime rule.
Try this on a chart
Compare touches, closes and pullbacks after closes as three separate setups.