Originally, the Keltner Channel Forex indicator represents volatility-based envelopes that are set above and below an exponential moving average.
It does share a lot of similarities to Bollinger Bands, which employs standard deviation to set the bands.
As an alternative to standard deviation, the Keltner Channel deploys the Averages True Range (ATR) to set channel distance.
The modified keltner channel Metatrader 5 Forex indicator on its part uses average range to set its channel distance and not the average true range.
The indicator also adds the most commonly used EMA calculation for the middle line as well.
There are additional options where you can opt to see the middle line or not, opt to see colors on slope (bars or candles), extra Heiken Ashi prices, and a couple more.
The EUR/JPY H4 chart below displays the keltner channel Metatrader 5 forex indicator in action
Basic Trading Signals
Buy Signal: Go long the currency pair when the middle line of the keltner channel Metatrader 5 forex indicator turns deep sky blue.
Sell Signal: Go short the currency pair when the middle line of the keltner channel forex indicator turns pale violet red.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the middle line of the keltner channel forex indicator turns pale violet red.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the middle line of the keltner channel forex indicator turns deep sky blue.
Tips: Price is bullish or bearish when it trades along the upper outer light blue line or lower outer misty rose line of the keltner channel MT5 forex indicator respectively.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart pattern indicator
Customization options: Variable (Time Frame, Moving average period, Moving average type, Middle line visible?, Moving average price, Color for slope up, Color for slope down, Range period, Range multiplier, Range calculating mode, View bars as:, Interpolate mtf data), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the keltner_channel315.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)