Keltner Cloud

Keltner Channels are volatility-based envelopes set above and below an exponential moving average. This VTL indicator is similar to Bollinger Bands, which use the standard deviation to set the bands. Instead of using the standard deviation, Keltner Channels use the Average True Range (ATR) to set channel distance. Keltner Channels are a trend following indicator used to identify reversals with channel breakouts and channel direction. Channels can also be used to identify overbought and oversold levels when the trend is flat.

In the first image, the ketner channel is used for a trend breakout trade. Price break above the upper channel and stays above it and channel begin to turn upward. In an uptrend pullbacks towards the center line can be used as long entries.

In second image, channel is flat, this means rangebound trading. Now the moves to the channel extrems can be used to enter trades in the oppostie direction as trading range extremes offer support resistance.

Usage

• Download the attachment.
• Copy it to your company VertexFX  Local VTL Files folder i.e. C:Program FilesCompany Namevtl10Local VTL Scripts
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.