Keltner Channels are a popular technical indicator that day traders can use to help assess the current trend and provide trading signals.LinkedInwithBackgroundTradingDayTradingHowtoDay-TradeWithKeltnerChannelsByFullBioFollowLinkedinFollowTwitterCoryMitchell,CharteredMarketTechnician,isadaytradingexpertwithover10yearsofexperiencewritingoninvesting,trading,anddaytrading.ReadTheBalance'seditorialpoliciesCoryMitchellReviewedbyFullBioFollowLinkedinGordonScott,CMT,isalicensedbroker,activeinvestor,andproprietarydaytrader.Hehasprovidededucationtoindividualtradersandinvestorsforover20years.HeformerlyservedastheManagingDirectoroftheCMT®ProgramfortheCMTAssociation.ArticleReviewedonAugust25,2020ReadTheBalance'sFinancialReviewBoardGordonScottUpdatedAugust25,2020KeltnerChannelsareapopular technicalindicator thatdaytraderscanusetohelpassessthecurrenttrendandprovidetradingsignals.Thechannelsusevolatilityandaveragepricestoplotupper,lower,andmiddlelines.Allthreeoftheselinesmovewiththeprice,creatingachannel-likeappearance.CalculatingKeltnerChannelsTheBalance/FreeStockCharts.com/CoryMitchellKeltnerChannelswereintroducedbyChesterKeltnerinthe1960s,buttheindicatorwasupdatedbyLindaBradfordRaschkeinthe1980s.Thislaterversionoftheindicatoristheoneinusetoday. KeltnerChannelsareacombinationoftwootherindicators:theexponentialmovingaverage (EMA)andthe averagetruerange (ATR).Themovingaverageistheaveragepriceforacertainnumberofperiods.Theexponentialvariationgivesagreaterweightingtomorerecentpricesandalesserweightingtopricesthataren'tasrecent.TheaveragetruerangeisameasureofvolatilitythatwascreatedbyJ.WellesWilderJr.andfirstintroducedininhis1978book "NewConceptsinTechnicalTradingSystems."Thetruerangeforagivendayisthegreatestofthefollowing:thecurrenthighminusthecurrentlow,the absolutevalue ofthecurrenthighminus thepreviousclose,ortheabsolutevalueofthecurrentlowminusthepreviousclose.Theaveragetruerangeisthena movingaverage,generallyoveraperiodof14days,ofthetrueranges.HereishowKeltnerChannelsarecalculat