KC (Keltner Channel)
A Keltner Channel (KC) is a volatility-based indicator that consists of three lines. The middle line is an exponential moving average (EMA) of the price. The upper and lower lines are placed above and below the EMA at a distance determined by the Average True Range (ATR). Keltner Channels can be used to identify trends, breakouts, and overbought/oversold conditions.
Arguments
| Name | Description |
|---|---|
period | number of periods (integer greater than 0). |
multiplier | Usually 2. |
type | one of avg, up or low. |
Useful Signal Expressions
1. Price breaks above upper Keltner Channel
Signal:
close().crosses_above(kc(20, 2, up))
Explanation: The closing price crosses above the upper Keltner Channel, which can be a signal of a bullish breakout.
2. Price breaks below lower Keltner Channel
Signal:
close().crosses_below(kc(20, 2, low))
Explanation: The closing price crosses below the lower Keltner Channel, which can be a signal of a bearish breakdown.
3. Price reverts to the mean
Signal:
close().crosses_above(kc(20, 2, avg))
Explanation: The closing price crosses above the average of the Keltner Channel, which can be a signal of mean reversion.