The Multiple Keltner Channels indicator is a generalized version of the Keltner Channels, replacing the SMA with any of 30 moving averages.
Indicator Description
A standard Keltner channels indicator is built from a simple moving average (SMA) with two channels lines above and below. The two channel lines above and below are drawn at a distance from the center line. This distance is a multiple of the simple moving average of the ranges of the past N bars.
The Multiple Keltner Channels allows you to replace the SMA with any of 30 moving averages. The volatility measure used to calculate the distance of upper and lower line from the center line. One may calculate the distance using an average range (AR) or average true range (ATR). Furthermore, you may select different lookback periods for the moving average. The moving average is then the center line and applied to the range or true range.
The Multiple Keltner Channels come with an additional smoothing option for center line and channel lines. One may apply additional smoothing by further smoothing all plots with a 3-period simple moving average (SMA).
Slope color:
You may also use this indicator to display any of the above listed moving averages and color them according to slope. The slope is not based on a geometrical concept, as this would not be compatible with the scalability of modern charting applications. The indicator adjusts slope to bar volatility such that the indicator may be used across all instruments and bar types with the same settings. The slope is flat, up or down. You may adjust the “flat” threshold via the neutral threshold parameter in the dialogue box. When you set that parameter to zero, the slope will not show any flat sections, but the moving average will always be identified as upsloping or downsloping. Channel lines may be unselected, if you just wish to display the selected moving average.
Volatility measures:
The standard Keltner Channel use the range to establish the channel lines. With this indicator you may substitute the range with the true range. As default, the multiple Keltner Channel applies the true range, in order to facilitate use with other indicators.
Indicator on indicator:
If you use an indicator as input series, the range always return a value of “0”. However, the average true range will return the absolute amount of the difference of two neighboring data points of the selected input series. Therefore, one may only apply the Multiple Keltner Channel to other indicators when the offset formula is set to “True_Range”.
Paint Bars:
The Multiple Keltner Channel indicator comes with paint bars. Note that the paint bars will change color according to the slope of the center line. Also, you may display the paint bars without the other indicator plots. The colors of the paint bar will then show the slope of the moving average selected as center line.
Sound Alerts:
In case that the sound alerts are active, the indicator will alert you when the trend derived from the slope of the center line changes. Currently, there are no sound files included with the zip file, but it is easy to create them and copy them to the NinjaTrader sounds directory.
Other Library indicators
The Keltner Channel indicator is most reliable when aligned with a higher timeframe trend / momentum bias. For a few suggestions on how to do that, please review our Indicator Spotlights on the TDI indicator, the Donchian Channel or the Heikin Ashi bars. The Traders Dynamic Index, Donchian Channel and the Heikin Ashi indicator are all available from the indicator library.
You may also increase the probability of successful trades by “buying support and selling resistance”. Additional information on that can be found in our Indicator Spotlights on the Daily Pivot Levels. A variety of Pivot indicators are available from the Session Tools category, including the Standard Daily Pivots / Camarilla Pivots Daily / Rolling Daily Pivots, Standard Weekly Pivots / Camarilla Pivots Weekly / Rolling Weekly Pivots, Standard Monthly Pivots / Camarilla Monthly Pivots / Rolling Pivots Monthly and the Standard N-Monthly Pivots / Camarilla N-Monthly Pivots.
The indicator library also has the MACD KC lines and the Gapless Keltner Channel indicators.
Finally, our Indicator Spotlight has also reviewed other indicators from our Channel Indicators category, namely the Regression Channel and the Squeeze indicator (being the dizygotic twin of the Squeeze Channel indicator).
The Keltner Channel indicator is available for NinjaTrader 8.
