KC (Keltner Channels)

What are Keltner Channels?

Keltner Channels use EMA(20) as the middle line with upper/lower bands at ±1.5×ATR. Similar to Bollinger Bands but uses ATR instead of standard deviation, making them smoother.

Parameters (20/1.5)

• X-Axis: Time (candle intervals)
• Y-Axis: Price (auto-scaled)
• Upper: EMA + 1.5×ATR (solid)
• Middle: EMA(20) (dashed)
• Lower: EMA − 1.5×ATR (solid)

Interpretation

• Strong uptrend: Price above the upper channel
• Strong downtrend: Price below the lower channel
• Squeeze: KC + BBands squeeze = volatility expansion imminent
• Mean reversion: price returns to middle EMA

Trading Signals

• Buy: pullback to middle EMA in an uptrend
• Sell: rally to middle EMA in a downtrend
• KC squeeze with BBands = breakout setup

Price Overlay

• Close Price: Actual closing price (same Y-axis, dashed violet)
• Price above upper KC = strong uptrend breakout
• Price below lower KC = strong downtrend breakout
• Price returning to middle EMA = mean reversion