Skip to content
SCUTA
Indicatorsintermediate
KELTNER CHANNELSBOLLINGER SQUEEZEKC

Keltner Channel

Volatility envelope using a 20-period EMA as midline and ATR multiples (typically 2×) as upper and lower bands.

Also called KC

Formula
Middle = EMA(n, typically 20);
Upper = EMA + (ATR(n) × multiplier);
Lower = EMA − (ATR(n) × multiplier)

Keltner Channels wrap an EMA with bands calculated as EMA ± (ATR × multiplier). Because the bands use ATR rather than standard deviation, they tend to be smoother and less prone to sudden expansions than Bollinger Bands.

Price consistently closing above the upper band signals a strong trend; closes below the lower band signal a downtrend. When Bollinger Bands contract inside Keltner Channels, a Bollinger Squeeze is forming — a popular setup for anticipating breakouts. Keltner Channels also serve as dynamic support and resistance in trending markets.

Related terms