The Keltner Channel indicator helps to conduct the operational analysis of the current situation in the market. In fact, it is the continuation of the Charles Keltner’s technical analysis indicator, which was developed in the 1960s’. But it provides much more possibilities for traders to succeed in the binary options’ trading. It happens due to the significantly extended functionality and usage of the several signal lines at the same time. These lines are the 10-days simple moving averages and they plot on three most significant price levels of the followed tool, in other words, on maximum, on minimum, and on closing price.
In order to calculate the upper and down bands in the Keltner Channel binary options’ indicator, the certain statistical method is used. This method is based on the previously calculated difference of the entire price range for the certain period of time. In fact, the calculation of the middle value of extreme points is carried out. For this reason, this indicator is very similar to such auxiliary tools like the Bollinger Band, the Envelopes, and so on. The Keltner Channel binary options’ indicator is based on the market volatility in the certain price range.
Work with the Keltner Channel binary options’ indicator is very simple. It can be used even by those who started working in this market only recently. This auxiliary tool doesn’t require using any additional settings. Nevertheless, if a trader uses his own strategies, which require the non-standard approach to this binary options’ indicator, it may be needed to make additional changes in the indicator’s settings.
MA Period is the parameter that allows making changes to the periods of processing of the received statistical data subsequent to the results of market’s trading. This parameter is set to 10 by default. If you change the settings upwards, signals regarding a trend will become more accurate. But in this case it will be pretty difficult to determine the slight oscillations, which may occur in the market too.
If you set a lower value for this parameter, the opportunity to determine the slight oscillation movements will appear, but, at the same time, the false signals regarding possible reverse of the trend can appear too.
Mode MA allows to choose which type of the moving average will be used in this indicator. The indicator works with the simple moving average by default. The Price type option changes the type of price which is used with the certain tool.