The Keltner Channels is a volatility-based indicator that uses a pair of values placed as an "envelope" around a data field.
Keltner Channels are similar to the Bollinger Bands and share many of their characteristics but represent volatility using high and low, rather than the standard deviation of the one field.
The values are calculated by taking the Exponential Moving Average of the data for a given period and adding or subtracting twice the average true range from the moving average. Envelope theory states that prices will most likely fall within the boundaries of the envelope. If prices drift outside their envelope this may signify a trading opportunity.
Calculation:
MA = Moving Average
TypPrice = Typical Price indicator
TrueRange = High-Low
Inputs:
Period = 14
Indicates time period(the number of days for daily analysis, the number of weeks for weekly analysis, etc.).
Moving Average Type = Exponential
Indicates Moving Average type.
Indicator Type: Trend