Keltner Channels are a volatility-based technical indicator. The channels are composed of two bands plotted around an Exponential Moving Average (EMA) of the data for a given period and are they are calculated by adding or subtracting twice the Average True Range (ATR) from the moving average.
The King Keltner trading strategy generates a buy signal when the market penetrates the upper band and a sell signal when the market penetrates the lower band. The idea is that a breakout out above or below the bands signals a change in trend. The strategy buys on strength and sells on weakness.
📈 See also: Directory of Trading Strategies