Courses / Volatility and Volume Indicators

Keltner Channels

EMA-based channels that use ATR for their width.

Keltner Channels draw an EMA (often 20) with bands a multiple of ATR above and below. They are smoother than Bollinger Bands because ATR is less reactive than standard deviation.

Price closing outside the channel suggests strong momentum. When Bollinger Bands move inside the Keltner Channel, it is often called a squeeze.

Use them to identify trend strength and breakouts.

Key takeaways

• EMA with ATR-based bands
• Smoother than Bollinger Bands
• Bollinger inside Keltner = squeeze

Quiz

• Keltner Channels use: Answer: ATR for width. Width is ATR-based.
• They are usually: Answer: Smoother than Bollinger Bands. ATR reacts less.
• A close outside the channel suggests: Answer: Strong momentum. Momentum is strong.

Educational content, not financial advice.