Keltner channel
The Keltner Channel is a method of technical analysis chart. He was first introduced in 1960 by Chester W. Keltner ( 1909-1998 ). He is illustrative of potential course.
Similar to the Bollinger Bands, the graph of upper and lower " bands " is circled. First, a moving average is formed, the basis for this is the so-called " typical price ".
Calculate the typical price:
The sum of the day's highest price, lowest stock price and the closing price is divided by the value 3, so as to obtain a daily average price.
In the second step of the day's highest price is deducted from the daily low, one obtains in this way the average of the daily trading range. This value is a measure of the flexibility and can be adapted to different applications by multiplying by a factor. This factor F was not introduced until later; the factor is set to 1, this corresponds to the original formula. Keltner calculates the moving average and the daily trading range for 10 days.
Interpretation
Breaks the circuit through the upper belt, it should point to another possible price increase in the future. Conversely may indicate a break of the lower band to continue falling prices.