FOREX for LIVING: Keltner Channels Trading System

Keltner Channels Trading System is one of the well-known trend following trading system, this system is devised for use as trend following system, but they may also be used to trade on ranging market conditions. The amazing fact is it produces strong trade signals and detects the right trend with higher success rate. The system has been designed with the combination of Keltner Channels with one 8 period EMA to produces crossover trend signals.

Keltner Channels Trading System is suitable for newbie traders who at least knows basic of trend based trading systems. It able to apply on any currency pair window and can fit with any time frame chart.

After the installation success, the system will appears on chart like following figure.

Keltner Channels Trading System

INDICATORS:

Keltner Channels: It appears at the main chart window as three lines channel. Its job to read past 40 respective periods of price data and draws it as three different levels like moving averages. These levels get wider when the trend is strong while gets narrower when the market is in choppy condition with lower volume.

8 EMA: This is a fast parameter of Exponential Moving Average. They use it to identify short-term market trends and to find right entry places. It also creates crossover signals with another indicators levels at the main chart. When the trend is bullish, Bar price holds above 8 EMA levels and then bearish trend occur when bar price stays below 8 EMA levels.

Keltner Channels Trading Indicators

RULE of Keltner Channels Trading System

BUY Entry

Bar price closes above the 8 EMA and Keltner Channel and plots the bullish cross over.
8 EMA jumps above the Keltner Channel and stays rising
Set stop loss below the Keltner Channels levels
Close order BUY whenever 8 EMA crosses below the Keltner channel and plots the bearish cross over.

Keltner Channels Trading System BUY conditions

SELL Entry

Bar price closes below the 8 EMA and Keltner Channel and plots the bearish cross over.
8 EMA falls below the Keltner Channel and keeps moving downwards
Set stop loss above the Keltner Channels levels
Close order SELL whenever 8 EMA crosses below the Keltner channel and plots the bullish cross over.