Keltner ATR Bands measures the highs and lows of the recent trend range and forecasts the length of upcoming market momentums. It helps traders to determine the possible range of the price movements so that traders can set a target of their potential profit targets. It also assists you to avoid bad trades or the trades offering less margin than your budgeted loss.
Keltner ATR Bands is a scalping indicator that sketches short-term trading opportunities thus suits well when applied on shorter timeframes like M5 & M15. However, this ATR indicator can be applied to trade all kinds of forex currency pairs within the forex MT4 trading platform.
Keltner ATR Bands Overview
Download and install the indicator on your MT4 terminal. Once you’re done. Your chart will appear like the following image:
Keltner ATR Bands Explanation
Keltner ATR Bands has been developed with a combination of 50-day period Keltner MA and ATR (3.75 multiplied factor) in order to predict the future market ranges.
The indicator has been effective because it has been observed that price often respects the area outlined by the indicator as short-term support/resistances. These levels often turnouts as solid swing areas of the market.
The lower Keltner ATR band works as a support and the upper one as a resistance level of the market range over the selected period of time. As a trader, you require to aim long entries from the support zone and short entries from the resistance areas plotted by the indicator.
Keltner ATR Bands: Buy Conditions
- Price is supported by the lower Keltner ATR band
- A bullish candle is plotted right above the supporting band
- Buy triggers after the above conditions are met
- Set stop loss below the lower band area
- Exit long or take profit whenever price hits the upper band area of the indicator
Also Read: CAP Channel Trading Indicator MT4
Keltner ATR Bands: Sell Conditions
- Price is resisted by the upper Keltner ATR band
- A bearish candle is plotted right below the resisting band
- Sell triggers after the above conditions are met
- Set stop loss above the upper band area
- Exit short or take profit whenever price hits the upper band area of the indicator