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Keltner channel is a popular indicator for analyzing trends and for finding trend changes. The indicator was introduced by Chester W. Keltner in 1960 in his book 'How to Make Money in Commodities'; Keltner named this indicator 'Ten Day Moving Average Trading Rule'.


Many later traders have modified the Keltner channel trend indicator for getting custom results. The original one has a center line and upper and lower lines drawn using simple moving averages. The center line is a 10-day simple moving average of typical price,


The upper line is the 10-day MA of highs on each day and lower day is the 10-day MA of lows on each day. The popular modifications of Keltner channel trend indicator include:

• Using different time periods
• Using Exponential Moving Average (EMA) for drawing the lines
• Using Average True Range (ATR) for drawing upper and lower bands

As there are different types of Keltner channels available, they are interpreted in different ways. In general, close above upper band is considered a bullish signal and close below lower band is considered a bearish signal. Crossing of upper band from above and of lower band from below indicate trend reversal, and buy and sell signals are generated accordingly.

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