Are you wondering how to use the Keltner Channel MT4 indicator to improve your earnings and trading strategies? Then you are in the right place. You will agree with us that the forex market is already saturated with lots of trading tools and technical indicators for traders to leverage. Understanding the workings and how to use these indicators is fundamental if you must succeed as a forex trader; hence, the reason why we curated this article.
The Keltner channel MT4 is a unique trading tool that every category of traders should include in their trading arsenal. For the avoidance of doubt, this technical indicator is capable of improving your revenue and also making life easier for you as a forex trader.
The truth is that you cannot perfectly keep watch over the forex market on a 24/7 basis looking out for the perfect entry and exit points to make the best out of the market. But with this indicator, you can do all of these with just a few clicks.
What Is Keltner Channel MT4 indicator?
The Keltner Channel MT4 is a tool designed to help traders locate essential trends. The indicator uses a similar principle like those in Bollinger bands and envelopes. The difference between the Keltner channel MT4 indicator and the former is that a true range is used in the Keltner channel. While the lower band is calculated by subtracting the average true range from the moving average, the upper band is the addition of the moving average and the average true range.
The general rule for using the indicator is that the upper band detects whenever the forex market is overbought. Similarly, the lower band track whenever the market is oversold. The essence of the indicator is to transform historical data that has been accumulated.
In a nutshell, the theory governing the use of the indicator is as follows:
1. Plot the bands at a specific distance from the average market price.
2. When the bands are far away, it means there is a significant market move.
3. There is a high chance that the market will move in a particular direction if the market moves through those bands.
Advantages of Using the Keltner Channel MT4
1. The Keltner channel indicator is a reliable tool for traders to use all over the world to create signals using price action.
2. It helps traders to determine the current trend across all timeframes, currency pairs, and asset classes.
3. It can be used together with other indicators to form a formidable trend direction tool for trading the FX market for maximum profits.
4. The indicator can also be used to detect powerful and clean reversals in price action in real-time.
5. During day trading, this tool can help generate reliable trading signals.
6. The Keltner channel MT4 also helps traders to determine price volatility in any currency pair.
Demerits of The Keltner indicator
The only noticeable disadvantage of using the Keltner channel indicator is that it may generate false signals at some points. We advise you not to use this indicator in isolation, always combine it with other reliable technical metatrader indicators to increase your chances of winning in all trades.
How to Trade Forex Using Keltner Channels
While this indicator shows currency pair hangout position, it holds dynamic resistance and serves as a dynamic support.
Using the Indicator as Resistance Levels and Dynamic Support
For the upper and lower lines, the settings used by veteran traders are 2 x ATR (10) and EMA (20). The middle line serves as a pullback and is very significant during ongoing trends.
The price action is confined in the upper half of the indicator in an uptrend. Also, the price action is usually confined in the bottom half of the indicator in a downtrend. Additionally, in a ranging market, there is a price swing between the top and bottom lines.
Installing the Indicator
1. Download the indicator from a reputable site or marketplace
2. Save the file in a location you would remember
3. Copy the file to your MT4 indicator directory
4. Restart or start your MT4 trader to launch the indicator
5. Select the chart you want to rest run the indicator
6. Head straight to the indicator list and look out for the Keltner channel MT4 indicator.
7. Right-click on the indicator and adjust the default settings to suit your trading style
8. Attach the indicator to the chart
9. The indicator should appear on your trading chart.
How To Remove The Indicator
1. Start your MT4 trader
2. Click on the MT4 indicator directory
3. Look out for the Keltner channel MT4 indicator
4. Right-click on the indicator and click on delete
5. The indicator should disappear from the chart.
Summary of Keltner channel MT4
Keltner channel MT4 is one of the best technical indicators on the forex market. It is reliable when it comes to locating significant trends in any currency pair. It also works on all timeframes.
The simple rule for using this tool is that the upper band detects whenever the forex market is overbought. On the other hand, the lower band track whenever the market is oversold. The Keltner indicator is easy to download and install on the MT4 trading platform. Whether you are a scalper or day trader, you can use this indicator to make the most out of the forex market.
To maximize the use of this indicator, we encourage you to combine it with other technical indicators like the support and resistance indicator, MACD, Stochastic Oscillator indicator, as well as the breakout indicator.
The good news is that we have these technical indicators listed on our website along with others. You can check them out here. One thing is sure; these tools are certain to help winning trades, plus, they will also improve your trading strategies.