Keltner Channel

Keltner Channel
This is a pointer of the momentum of the market. This was created by W.Keltner and also published in the book named as “How to Earn Money in Commodities.” This channel is the envelope indicator which is same as the Bollinger Bands. This channel consists of nearly three bands of measurement. The middle band indicates the moving average high, low and the closing costs for an offered asset. The low and high bands are measured by takingthe moving average of dissimilarity between low and high closing costs, then deducting and adding this value from middle band. On the basis of theory, the asset costs should decrease between low and high bands in most of the conditions. The lasting five percent of the situations are therefore powerful indicators that asset costs are attracting momentum in either way. The interpretation of this Channel by Keltner is really simple. It says purchase when the cost is more than high band and sells when the cost is underlow band. According to this suggestion, a dealer would be measuring the trend in cost continuing for certain time period in a given way. On the other hand, an interpretation of Keltner Channel advices on the opposite, purchase when the cost falls out of Channel, sells when the cost increases over it. This interpretation is based on the high momentum of an asset that shows is the assetover sold or overpurchased.