Binary Options Indicator Keltner Channel was invented in every detail and is described by Chester Keltner, in whose honor and was named later. The functional part of the later greatly expanded by Linda Raschke. She brought to light significant additions.
Here's how you can adjust the indicator on a live chart
As you can see by the screenshot above, Keltner Channels Indicator It takes the form of three curved lines. Something like the price corridor. For trend indicator.
Signals Indicator Keltner Channels:
- If the price crosses the lower boundary of the indicator, you should expect a quick rebound and turn in the opposite direction. This indicates entry into the oversold zone. In this case, the option should be open CALL.
- If the price crosses the upper limit of the indicator, it is also expected to rebound and turn in the opposite direction. This indicates entering the overbought zone. The option should be open for a fall PUT.
The strategy is based on the fact that the price will always strive to get back in the channel frame. This is confirmed by my personal observations.
The indicator shows good results, you can safely use it in their technical analysis. To avoid spurious signals, can be combined Keltner Channels Indicator even with some tools to determine the strength of a trend.
Outwardly, this indicator of technical analysis is very similar to the Bollinger Bands. It also consists of three MA, which change their direction depending on price changes. It is also universal. With it, you can determine the trend, as well as trade within the horizontal flat.
For the duration of 20-30% of its time, the price remains within the channel traced by the lines of the Keltner Channels indicator. And the rest she spends on it, to break through the channel and go in search of another direction (trend).
But there was not without flaws. When trading during a flat, there are many false breakdowns of the upper and lower bounds. To filter out false signals, it is recommended to use the additional oscillators MACD, RSI, Stochastic, ADX and others.
I recommend to study at least the main reversal candlestick patterns. They will be the perfect complement to getting accurate signals to open trades.
In trade on the trend, I recommend opening deals only in its direction. That is, if we, for example, have a downtrend, then it is better to wait for those moments when the price reaches the upper boundary of the channel and bounces off in a downward direction.
As for the choice of trading assets for work, I advise you to use those currency pairs that have medium or low volatility. With high activity increases the risk of making chaotic jumps, which will lead to the appearance of false breakdowns of the borders of the Keltner channel.