Keltner Channels

Keltner Channels build a price band around an EMA, with the band width set by a multiple of ATR. The result is smoother than Bollinger Bands because EMA replaces SMA and ATR replaces stddev.

Formula

middle = EMA(close, ema_period)
band   = ATR(atr_period) * multiplier
upper  = middle + band
lower  = middle - band

Params

• EMA period - center EMA window. Default 20.
• ATR period - ATR window. Default 10.
• multiplier - ATR multiplier for band width. Default 2.0.

Output

Three columns:

• {name}_upper
• {name}_middle
• {name}_lower

Usage

• Breakout entries on close above upper / below lower (same pattern as Bollinger breakouts, but smoother).
• Trend follow: price sitting on or near the upper band consistently = strong uptrend.
• Combined with Bollinger to detect a squeeze (Bollinger inside Keltner means compressed volatility). See Volatility Squeeze.

Keltner vs Bollinger

Keltner uses ATR, which only counts actual movement; Bollinger uses stddev of closes, which is more sensitive to a few extreme readings. Keltner therefore tends to produce fewer band touches but each touch is more informative.