Keltner Channels are volatility-based envelopes plotted above and below an exponential moving average using the Average True Range. Unlike Bollinger Bands, which use standard deviation, Keltner Channels produce smoother bands that are less reactive to individual price spikes. This makes them effective for identifying trend direction, overbought/oversold conditions, and volatility squeeze setups when combined with Bollinger Bands.
Centre line: typically a 20-period EMA. Upper band: EMA + (multiplier x ATR). Lower band: EMA - (multiplier x ATR). Standard multiplier is 1.5 or 2.0 x ATR. Smoother than Bollinger Bands due to ATR-based calculation. Bollinger Band squeeze inside Keltner Channels signals imminent volatility expansion.
Enter long when price closes above the upper Keltner Channel, signalling strong bullish momentum and a breakout. Buy on a pullback to the centre EMA line during an uptrend with price respecting the lower channel. Enter when Bollinger Bands squeeze inside Keltner Channels (TTM Squeeze) and then expand, with the breakout direction determining entry. Go short when price closes below the lower channel with confirming volume.
Exit momentum trades when price re-enters the channel after trading outside it. Target the opposite channel boundary for mean-reversion trades from one channel extreme. Trail stops using the centre EMA line — exit if price closes below it on two consecutive bars. Take profits when the channel bands flatten, indicating momentum exhaustion.
15M, 1H, 4H, Daily
The TTM Squeeze (Bollinger Bands contracting inside Keltner Channels) is one of the most reliable volatility breakout signals available — master this setup. Use Keltner Channels for trend direction and Bollinger Bands for volatility extremes; combining both provides a fuller picture. Adjust the ATR multiplier to match the asset's typical volatility rather than using defaults blindly.
The Ultimate Oscillator, developed by Larry Williams, combines buying pressure across three different timeframes — typically seven, fourteen, and twenty-eight periods — into a single indicator weighted to reduce false signals. By incorporating multiple timeframes, it avoids the whipsaws common in single-period oscillators while still providing timely signals. Williams designed specific entry criteria involving divergence and threshold breaks to trade this indicator.
The Vortex Indicator consists of two oscillating lines — VI+ (positive trend movement) and VI- (negative trend movement) — that capture the directional movement of price through the relationship between the current high and prior low, and the current low and prior high. Crossovers between these lines signal trend changes and provide entry and exit timing for trend-following strategies across any market.
The Average Directional Index quantifies trend strength on a scale from 0 to 100, regardless of direction. Developed by J. Welles Wilder, ADX is derived from two directional movement indicators (+DI and -DI) that measure bullish and bearish pressure respectively. A rising ADX above 25 signals a strengthening trend, while ADX below 20 indicates a ranging or trendless market — making it an invaluable filter for choosing between trend and range strategies.
The Ichimoku Kinko Hyo (Ichimoku Cloud) is a comprehensive indicator system that defines support and resistance, identifies trend direction, gauges momentum, and generates trading signals — all in a single glance. Developed by Goichi Hosoda, the system consists of five lines and a shaded cloud (Kumo) that projects into the future, providing a uniquely forward-looking view of market equilibrium.