On this page
Keltner — Averages & volatility, on the price chart.
What Keltner measures
The basis is the EMA of close over its own period, and the bands are the basis plus and minus the multiplier times Wilder's ATR over a separate period. This is the modern variant popularised by Linda Raschke and used by ATAS and TradingView; Keltner's original construction used simple averages of typical price and is not what is computed here. The two periods are independent, so the speed of the centre line and the responsiveness of the width can be set separately.
The formula, as implemented
This is not how the indicator is usually defined elsewhere — it is what the shipped code computes, documented next to the implementation:
Keltner : basis = EMA_N(close), bandes = basis ± k·ATR_M (variante moderne — Linda Raschke — celle d'ATAS/TradingView ; l'originale de Keltner utilisait des SMA de typical price). Défauts N=20, M=10, k=2.
How to read it
- Width is a volatility statement in price units: the bands move apart when bars get larger, including when they get larger through a gap.
- A close outside a band means the move exceeded the recent average bar size by the chosen multiple, and in a sustained trend that state can persist.
- The basis slope changes what a touch means: a band touch with a flat EMA and one with a steep EMA describe different situations.
- A channel narrowing while the basis stays flat says bars have shrunk without direction changing, which is a compression, not a forecast.
- Before treating an excursion as exhaustion, look at the volume or delta profile at that price; the channel itself cannot tell you who traded there.
Parameters and defaults
The defaults are an EMA period of 20, an ATR period of 10 and a multiplier of 2. Lengthening the ATR period makes the width steadier and slower to acknowledge a change in bar size; shortening it makes the channel breathe with every large bar. The multiplier scales both bands symmetrically and accepts 0.5 to 5 in steps of 0.1, while both periods accept 1 to 200.
| Parameter | Type | Default | Range |
|---|---|---|---|
| EMA period | number | 20 | 1 – 200 |
| ATR period | number | 10 | 1 – 200 |
| ATR multiplier | number | 2 | 0.5 – 5 |
What it does not show
The channel measures average bar size, not conviction: an expansion produced by one gap and one produced by sustained two-way trade look the same. Wilder's smoothing carries a large bar for many bars, so the channel can stay wide after the market has already calmed down. The whole construction is bar-based and blind to the aggressor side, which means absorption at a band edge leaves no mark here and has to be read from the footprint or the book. Nothing is drawn before both the EMA and the ATR are defined.
Related indicators
- SMA — Averages & volatility
- EMA — Averages & volatility
- WMA — Averages & volatility
- Hull MA — Averages & volatility
- ATR (Wilder) — Averages & volatility
- Bollinger — Averages & volatility
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Frequently asked questions
- What is the difference between Keltner Channels and Bollinger Bands?
- Bollinger sets its width from the standard deviation of closes, Keltner from the Average True Range. True range includes the distance between one bar and the previous close, so Keltner reacts to gaps that Bollinger cannot see. Keltner also centres on an exponential average while Bollinger centres on a simple one.
- Which Keltner formula does this use?
- The modern variant: an EMA of close for the basis and an ATR multiple for the bands, matching ATAS and TradingView. Keltner's original used simple moving averages of typical price with a range-based width, and that version is not what is computed here.
- Why are the EMA period and the ATR period separate?
- They control two different things. The EMA period sets how fast the centre line follows price, while the ATR period sets how quickly the width reacts to a change in bar size. The defaults of 20 and 10 give a centre line slower than the width.