Adaptive Keltner Channels
What is it?
What it measures:
Volatility-based envelope channels set above and below an EMA using Average True Range (ATR) multiples.
How to interpret it:
- Channel Breakouts: Closing outside the upper Keltner channel signals strong trend continuation.
- Middle Line Rebound: The middle EMA acts as structural support during healthy bull trends.
Used for:
- Filtering volatility and identifying strong trend breakouts.
Limitations:
- Channel boundaries lag during explosive gap-open events.