Keltner Channels Trading System is one of the simplest trend following trading systems that we’ve ever experienced. The amazing fact is, in spite of its easy outlook, it produces strong trade signals and detects the right trend with surprisingly higher success rate. His system has been designed with the combination of Keltner Channels and just one 8 EMA to plot crossover trend signals.
Keltner Channels Trading System is undoubtedly suitable for newbie traders who feel the complexity with other trend based trading systems. Other than that, you’ll be able to apply it on any currency pair window and can fit with any time frame chart of your trading terminal.
Keltner Channels Trading System Overview
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Keltner Channels Trading System Anatomy
- Keltner Channels: It appears as three parallel distant levels at the main chart window. It has been designed to read past 40 respective periods of price data and plots three different levels like moving averages. These levels get wider when the trend is strong and gets narrower when the market is possibly in choppy condition with lower volume. In case of bullish trend price closes above its levels and when price bars closes below its levels should be interpreted as the bearish trend of the market.
- 8 EMA: This is a very common parameter of Exponential Moving Average among the professional traders. They use it to identify short-term market trends and to find suitable entry places. 8 EMA also creates crossover signals with other trend following indicators levels at the main chart window. When the trend is bullish, you’ll see price holds above 8 EMA levels and for bearish trend it will be resisted from such level and will often be forced to move downwards.
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Keltner Channels Trading System: Buy Parameters
- Price closes above the 8 EMA and Keltner Channel
- 8 EMA crosses above the Keltner Channel and keeps rising
- Enter long whenever such bullish cross over occurs
- Stop loss below the Keltner Channels levels
- Exit long whenever 8 EMA crosses below the Keltner channel and plots the bearish cross over.
Keltner Channels Trading System: Sell Parameters
- Price closes below the 8 EMA and Keltner Channel
- 8 EMA crosses below the Keltner Channel and keeps moving downwards
- Entershort whenever such bearish cross over occurs
- Stop loss above the Keltner Channels levels
- Exit short whenever 8 EMA crosses above the Keltner channel and plots the bullsih cross over.