What is Keltner Channel?

Keltner Channel is a graph that displays a technical analysis of shares prices in order to determine the volatility of prices and market trends. The graph consists of three rows or belts. The middle line illustrates the sliding average of the stock price. To create upper and lower belts, a number is used to add or deduct stock prices. The investor creates a graph for the number used in the calculations that portray the upper and lower bands of the Keltner channel. Usually a multiple of 1.5 is used. This number is called an average actual range multiplier . The multiplier creates the Keltner Channel settings. He called it a ten -day rule of trading with the average gliding average. Although it is not clear whether Keltner has created this analysis, he is now known as Keltner Channel.

The investor monitors the price of shares in relation to how he moves in these three bands to predict market trends. Most often, when the stock price moves above the top bands, it is a signal to buy. On the contrary, when the stock price drops below the bottom zone, the Graph of OZIt loads the sales signal.

Some investors use the opposite approach. They buy when the stock price drops below the lower zone. When the stock price goes above the top zone, these investors consider it a signal for sale of shares.

Investors who buy or sell outside bands follow price trends. The trend occurs when the price is constantly moving in one direction. If the market is without trend, investors can still use the Keltner channel to buy and sell signals.

On the market without trends, the channel can help predict when the supply is reached or sold. Investors use these situations on Mazisk. When the price breaks under the lower zone, it is converted. Investors are waiting for the price to close inside the band to buy shares. This waiting helps to ensure that shares do not start a descending trend.

6 To avoid major losses, the investor waits for the price to return to the band to sell shares.Waiting to move the price ensures that the high price is not the beginning of a real ascending trend. This helps the investor to ensure that he does not sell too early.

As with other market trends analysis, Keltner Channel is not infallible. Confidential investors use this as part of their analysis in deciding when to buy or sell specific shares. Combined with other techniques, mapping of shares with this technique can help the investor make informed decisions.