![]() Many trading platforms – including IG’s online trading platform – will calculate Keltner channels automatically for you. How to calculate KC with the Keltner channel formula If the asset’s price closes above the upper band – resistance – or below the lower band – support – of the channel, then it could signify that there will be either a change in the prevailing trend, or a trend acceleration. The first of the three lines for the Keltner channel is an exponential moving average (EMA), and the second and third lines – placed above and below the EMA – display an average true range (ATR) of the asset’s previous price action. Learn more about support and resistance levels Support is the level at which an asset’s price might stop falling resistance is the level at which an asset’s price might stop rising. Similar to other technical indicators which track volatility – such as Bollinger bands – the Keltner channel uses three separate lines to assess an asset’s volatility based on price action and support or resistance levels.įor reference, support and resistance refer to separate levels which appear to restrict an asset’s price movements. Keltner – is a channel indicator which seeks to identify areas of volatility in an asset’s price movements. The Keltner channel – named after its creator Chester W.
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