The Keltner Channel is based on the Average True Range and is sensitive to volatility. It may be used in place of standard deviation (Bollinger) bands or percentage envelopes.
Overview
The Keltner Channel is made up of two bands plotted around an Exponential Moving Average (EMA), usually the 20-day EMA.
Prices breaking through the bands often produce buy and sell signals. The indicator was originally developed by Chester Keltner and later modified by Linda Raschke to use an average true range (ATR) calculated over 10 periods.
Interpretation
As with all envelope or band systems, the probability is that price will remain within the envelope. When price breaks though the envelope, it can be taken as a signal to either buy or sell.
When prices close above the top band, this often means a breakout in upward volatility to be followed by higher prices. When prices close below the bottom band, prices are expected to move lower.
In a rising market the middle line, or 20 period EMA, should provide support. Conversely, in a falling market it tends to provide resistance.
As with all trend following systems, the Keltner Channel works well in up trends or down trends, but doesn't work well in a sideways channel. As a trend following system it is not meant to catch tops or bottoms.
Keltner channels should be used in combination with other indicators, such as RSI or MACD, to provide confirmation of the strength of a market. An exit strategy utilizing trendlines and other indicators can be particularly important, as can be seen from the example above. Waiting for the price to close below the lower band often erodes much of the potential profits from a good move.
The calculation for Keltner Channel, based on ATR, is as follows:
For the top or Plus Band, the ATR is calculated over 10 periods, doubled and added to a 20 period exponential moving average
For the bottom or Minus Band, the ATR is calculated over 10 periods, doubles and subtracted from a 20 period exponential moving average
Signals
When prices close above the plus band, it is a signal of strength and rising prices
When prices close below the negative band, a signal that prices will drop is indicated
Signals stay in effect until the prices close across the opposite band. This should often be tempered, however, with the use of other indicators to provide better exit opportunities.
Further information
Also see the overview on Envelopes & Bands; as well as Bollinger Bands, the Price Channel indicator, and Average True Range.
大交易时代原创翻译
Keltner Channel
肯特纳通道（Keltner Channel）：肯特纳通道是基于平均真实波幅原理而形成的指标，对价格波动反应灵敏，它可以取代布林线（Standard Deviation）或百分比通道(Percentage Envelopes)作为判市的新工具.
概况：
肯特纳通道是由两根围绕线性加权移动平均线波动的环带组成的，其中线性加权均线的参数通道是20。
价格突破带状的上轨和下轨时，通常会产生做多或做空的交易信号，指标的发明人是Chester Keltner，后来这一指标由Linda Raschke再度优化改进，她采用10单位的线性加权均线来计算平均真实波段（ATR）.
解释：
类同于所有的包络线或环带状系统，价格倾向于在环带内运动，当价格突破环带时，通常意味着会产生做多或做空的机会。
当价格报收在顶部环带之上时，通常意味着向上动能的突破，其后价格会继续走高。当价格报收在底部环带之下时，则预期价格会走低。
在一个上升的市道里，中线或20单位线性加权均线，对价格能够产生支撑作用，相反，下降的市道里，中线会压制价格上行。
和所有的跟随趋势系统一样，肯特纳通道在上升和下降趋势里表现出色，在盘整市内则有所逊色，原因很简单，跟随趋势系统不会致力于寻底猜头。
肯特纳通道应当和其他指标混合应用，比如说RSI和MACD，这样可以对市场的强度进行确认。与趋势线和其他指标配合的出场策略十分重要，从上图的案例中，我们会明白这一点，等待价格收在底部环带之下，意味着一个良好趋势中的许多利润会被侵蚀掉。
基于平均真实波幅的肯特纳通道运算公式如下：
对于顶部环带来讲，在10单位周期基础上计算出平均真实波幅，乘以双倍，然后把这个数值与20单位周期的线性加均线数值相加，就会得出新的顶部环带数值。对于底部环带来讲，在10单位周期基础上计算出平均真实波幅，乘以双倍，把这个数值从20单位周期线性加权均线数值扣除，就会得出新的底部环带数值。
信号：
当价格报收在顶部环带之上时，意味着价格呈强势，后市看涨。
当价格报收在底部环带之下时，意味着价格呈弱势，后市看跌。
肯特纳通道发出的信号会一直有效，直到价格报收于另一侧波带之外，不过，与其他指标配合之后，经过调和优化的肯特纳通道交易法能够给出更好的出场机会。
延伸阅读：
包络线与环带，布林线和价格通道，平均真实波幅概况。
