How to Use Keltner Channels in Forex Trading

How to use Keltner Channels in Forex trading

Keltner Channels are used to identify the region within which a currency pair ranges in terms of price in a given period.

The upper channel can be used as dynamic resistance while the lower channel is used as a dynamic support.

how to use keltner channels in forex trading

To set Keltner Channels, most traders use the standard 2*ATR (10) for the lower and upper lines and EMA (20) for the middle line.

The middle line of a Keltner Channel acts as a pullback level in Forex trends.

How to use Keltner Channels as Dynamic Resistance

Keltner Channels are used as dynamic resistance during an upward trend as shown below.

Keltner channels as resistance level

In the uptrend above, the action in the forex market is confined in the upper half of the channel, where the top line is a resistance level while the middle line is a support level.

How to use Keltner Channels as Dynamic Support

During a downtrend, the Keltner Channels act as dynamic support levels as shown below.

Keltner Channels as Support Levels

Price action in a downtrend occurs within the bottom half of the channel. In this case, the lower line acts as the support level while the middle EMA line acts as the resistance level.

Summary

There is a buy signal when the price closes just above the middle line in an uptrend.

A sell signal occurs when the prices close just below the middle line in a downtrend.

This method is good for short term positions in Forex trading, such as 30-minute trades, 1-hour trades and intraday trades.

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