Keltner Channels Indicator for MT4 – [TradingFinder] - Download

The Keltner Channels Trading Indicator is a technical analysis tool used for identifying trends, volatility, and entry/exit points in the market. This indicator, similar in appearance to Bollinger Bands, consists of three colored bands in overbought and oversold zones, yet differs significantly in terms of calculation, interpretation, and signaling.

Keltner Channels Trading Indicator Table

The general specifications of the Keltner Channels Trading Indicator are provided in the table below:

Glance Keltner Channels Trading Indicator

The Keltner Channels Trading Indicator is a trend-following and volatility-tracking tool built with a simple moving average (SMA) as the central line and two ATR-based bands.

This indicator uses the moving average to track the trend and uses the ATR (Average True Range) to adjust the channel width based on current market volatility:

• In high-volatility markets, the channels widen;
• In low-volatility markets, the channels narrow.

Uptrend Scenario

In the 5-minute chart of the EUR/AUD pair, a bullish reversal signal occurs when the price breaks below the lower band and then re-enters the channel.

If a bullish reversal candlestick appears along with positive divergence in indicators like RSI or MACD, it reinforces the potential end of the oversold phase and the start of an upward movement.

Downtrend Scenario

The price chart below shows the NZD/JPY currency pair on a 30-minute timeframe.  In this trading tool, when the price returns to the channel after breaking above the upper band, it may indicate a weakening bullish momentum and a possible price reversal.

If this return is accompanied by bearish reversal candlesticks, it provides a strong signal to consider entering sell positions.

Keltner Channels Trading Indicator Settings

The settings panel of the Keltner Channels Trading Indicator is shown in the image below:

• Period: The lookback period
• Multiplier: Multiplier for ATR-based bands

Conclusion

When price returns into the Keltner Channel after breaking the bands—especially when combined with reversal candlesticks and divergence—it signals a potential trend reversal.

In overbought zones (upper band), these signals usually lead to sell opportunities, and in oversold zones (lower band), they often indicate buy opportunities.