In this article, we will review the Keltner indicator, which displays Keltner channels to help identify potential price reversals. We'll cover how to add the indicator to your chart, customize its settings, and utilize its features to improve your trading strategy.
The Keltner indicator shows Keltner channels: similar to Bollinger® bands, but with the size of the channel varying based on ATR rather than standard deviation.
You can configure the indicator to give you alerts when the price crosses the upper or lower channel (usually regarded as a reversal signal).
How to install Keltner indicator?
To download and install the Pro Trading Tools please follow these steps:
1. Login to FXTM profile > Hub > Pro Trading Tools
2. Download FX Blue or Trading Central for your Platform (Meta Trader 4 or Meta Trader 5)
3. Run the downloaded FX Blue and Trading Central files and apply them to your chosen MetaTrader Platform when prompted.
4. Relaunch the MetaTrader platform. You’ll find your FX Blue* and Trading Central tools in the ‘Navigator panel under ‘Indicators’ and/or ‘Expert Advisors’.
Note: FX Blue tools will appear in MetaTrader labeled as FXTM or Figaro app suite.
Using the Keltner indicator
Adding the indicator to a chart
You add the Keltner indicator to a chart in the usual MT4 way, either by dragging it from the Navigator onto a chart, or by double-clicking on it in the Navigator. You can also use standard MT4 features such as adding the indicator to your list of Favorites, or assigning a Hotkey to it.
Choosing the settings for the indicator calculation
You set the parameters for the indicator calculation via the Inputs tab. There are three main settings which control a Keltner channel:
• The moving-average period (e.g. 20 bars)
• The ATR period (e.g. 10 bars)
• The multiple of the ATR to add/subtract to the moving average (e.g. 2)
In addition, you can also choose the type of moving average to use (SMA, EMA etc.), and what type of price to base it on: close price, median, “typical” etc.
Colours and line styles
The indicator draws three lines: the mid-point (moving average), plus the high and low channels. You can set the colour and style for these lines in the usual way, via the Colors tab for the indicator.
Alerts
You can use the Inputs tab to turn on pop-up alerts whenever the current price crosses the upper or lower channel.
To prevent repeated and too-frequent alerts, the indicator will only display a maximum of one alert per bar. Once the price has crossed the upper or lower band, a new alert will not be generated until (a) the price has crossed back inside the channel, and then (b) there is a new cross beyond the upper or lower channel in a later bar.
