Keltner Bands Gold Trading Analysis and Keltner Bands Gold Trading Signals

Developed by Chester Keltner. Described in his book "How to Make Money in Commodities"

Keltner Bands are based on ATR technical indicator, the bands use ATR values to draw the bands lines.

These Bands form Channels that help to identify the Gold market trends using this simple volatility channel.

Keltner Bands

Construction

Keltner Channels are similar to Bollinger Bands except for the fact that Bollinger Bands use standard deviation method to determine volatility and to draw the bands.

For the keltner bands instead of using the standard deviation the average true range (ATR) measure of volatility is used.

This gold indicator is an n number of periods exponential moving average of the closing gold price. These bands are created by

adding (for the upper line) and

subtracting (for the lower line)

an (n-period simple moving average of an n-period ATR) * an ATR multiplier.

XAUUSD Trading Analysis and Generating XAUUSD Trading Signals

This gold indicator can be traded in much the same way as the Bollinger Bands.

Continuation signals

When xauusd price moves outside the bands then a continuation of the current gold trend is implied. A buy gold signal is when the channels are moving upwards and sell gold signal is when the channels are moving downwards

Continuation Buy Sell Gold Trading Signals

Reversal Gold Trading Signals - Double Tops and Double Bottoms

Tops and Bottoms made outside the bands followed by tops and bottoms made inside the Keltner channels indicate signal for reversals in the xauusd market trend.

Reversal Gold Trading Signals

Ranging Gold Trading Markets

In ranging markets a move that originates from one Keltner channel tends to go all the way to the other channel.