Have you ever heard of Keltner Channels Strategy?
I bet if you have been trading forex for quite some times and if you recently search for the expert advisor, you may have heard about this strategy.
There are lots of Keltner Channels Strategy out there with so many variations and so many creative ways to trade this strategy. One of the most discussed EA recently is the Keltner Pro EA from Jared Rybeck.
Today I'm not going to talk about Keltner Pro EA, instead I want to highlight the Keltner Channels itself and what is so interesting about Keltner Channels.
Keltner Channels strategy is a trading strategy based on price breakout. So it is another trading style from what you commonly used such as RSI, MACD, or even Bill Williams trading. It's not counter trend trading but it's a trend breakout trading and you can trade it on any time frame. You can scalp or even let the opened position run for several hours or even days.
Quoting Investopedia:
http://www.investopedia.com/articles/technical/03/021903.asp
Chester W. Keltner introduced and developed the Keltner Channels in his book "How To Make Money in Commodities" (1960). Like Bollinger Bands®, Keltner Channels are simplymoving-average bands. (See The Basics of Bollinger Bands®.) Moving-average bands and channels are the same thing: a middle line and two outer lines.
Keltner Channels represent the average of the high, low and the closing price of an issue. On each side of the middle line are bands that are formed from the daily high minus the daily low over a period of 10 days. Technicians believe the theory that the price of an issue is most likely to trade within the boundaries of bands or envelopes. The trader is to sell the issue when the closing price exceeds the upper band and to buy the issue when the closing price falls outside the lower band.
I myself use the Keltner Channels in somewhat different approach than the original Keltner Channels which uses period of 10 days. Instead of Keltner period 10, I use longer period 40 to avoid false break. This in return will need me to be more patient to wait for the break to occur.
Another indicator that I use is EMA 8 and EMA 21. This helps me to identify whether the breakout trend is still strong or subsided. Indication of strong breakout trend is when the price stays above EMA 8 or below EMA 8. But once price has entered the channels between EMA 8 and EMA 21, it indicates the momentum has subsided and I will wait for another breakout to happen.
Sometimes I set the TP at 10-20 pips. But again, the level will vary depends on what pair I traded.
There are lots of various Keltner Channels Strategy outside and in fact you can tweak it accordingly to suit your own trading style. What I share might helps and lighten your way to find the better way to trade. :)
Don't forget to let me know if it's worked for you :)
Happy trading!
Download Keltner Channels HERE
I bet if you have been trading forex for quite some times and if you recently search for the expert advisor, you may have heard about this strategy.
There are lots of Keltner Channels Strategy out there with so many variations and so many creative ways to trade this strategy. One of the most discussed EA recently is the Keltner Pro EA from Jared Rybeck.
Today I'm not going to talk about Keltner Pro EA, instead I want to highlight the Keltner Channels itself and what is so interesting about Keltner Channels.
Keltner Channels strategy is a trading strategy based on price breakout. So it is another trading style from what you commonly used such as RSI, MACD, or even Bill Williams trading. It's not counter trend trading but it's a trend breakout trading and you can trade it on any time frame. You can scalp or even let the opened position run for several hours or even days.
Quoting Investopedia:
http://www.investopedia.com/articles/technical/03/021903.asp
Chester W. Keltner introduced and developed the Keltner Channels in his book "How To Make Money in Commodities" (1960). Like Bollinger Bands®, Keltner Channels are simplymoving-average bands. (See The Basics of Bollinger Bands®.) Moving-average bands and channels are the same thing: a middle line and two outer lines.
Keltner Channels represent the average of the high, low and the closing price of an issue. On each side of the middle line are bands that are formed from the daily high minus the daily low over a period of 10 days. Technicians believe the theory that the price of an issue is most likely to trade within the boundaries of bands or envelopes. The trader is to sell the issue when the closing price exceeds the upper band and to buy the issue when the closing price falls outside the lower band.
I myself use the Keltner Channels in somewhat different approach than the original Keltner Channels which uses period of 10 days. Instead of Keltner period 10, I use longer period 40 to avoid false break. This in return will need me to be more patient to wait for the break to occur.
Another indicator that I use is EMA 8 and EMA 21. This helps me to identify whether the breakout trend is still strong or subsided. Indication of strong breakout trend is when the price stays above EMA 8 or below EMA 8. But once price has entered the channels between EMA 8 and EMA 21, it indicates the momentum has subsided and I will wait for another breakout to happen.
Sometimes I set the TP at 10-20 pips. But again, the level will vary depends on what pair I traded.
There are lots of various Keltner Channels Strategy outside and in fact you can tweak it accordingly to suit your own trading style. What I share might helps and lighten your way to find the better way to trade. :)
Don't forget to let me know if it's worked for you :)
Happy trading!
Download Keltner Channels HERE
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