Keltner Bands Metals Analysis & Keltner Bands Trading Signals

Created 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 which help to spot the Metals 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 market volatility & 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 metals indicator is an n number of periods exponential moving average of the closing metals 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.

Metals Trading Analysis & Generating Trading Signals

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

Continuation Trading Signals

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

Continuation Buy Sell Trading Signals

Reversal Metals 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 metal market trend.

Reversal Trading Signals

Ranging Metals Trading Markets

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