Lesson 27: How to Use Bollinger Bands and Keltner Channels in Your Trading
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8 سال پیش
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What Are Bollinger bands and Keltner channels? http://www.financial-spread-betting.c... What Is The Difference Between Bollinger Bands and Keltner Channels
Let me run through Bollinger bands and Keltners.
Now, Bollinger bands and Keltners I like these, I don’t use these to make my trading decisions, however, they basically provide an envelope for price. They are very similar Bollinger band is based on a standard deviation, Keltner channel is based on an average true range. I personally prefer a Keltner channel, it doesn’t really matter, they do very similar things. What they are doing is they have an average price in the middle like a moving average and then around them you have an envelope based on a setting that you use. So, for Keltners I am going to use a 2.5 period or a 2 period and it is the same with Bollinger bands. They are going to give you a bracket to work around. The way that I use them is that if we are on a daily chart, I won’t chase price if we are at the upper band, you can see how often we tag the band and then that is it we roll back, or if we tag the lower band we don’t get much further we have to unwind a little bit, we have to retrace the mean, before we can get going.
So, if I am really interested in a market and it is right up a Bollinger band or up a Keltner, I am not going to go long, I am going to wait for it to at least retrace a little bit before I go long, because generally it will contain price, not always, you are going to get time periods where it does hug that upper Bollinger or lower Bollinger or upper Keltner or lower Keltner but I like to use it as a guide. I don’t use it so much on the lower timeframes, because you can stay out of it for such a long time, it is more powerful I think on the higher timeframes, like the 5 and the 15 minute, if you are day trading. So, you can see how it bounces up and down off the upper and lower Bollinger band.
Use it as a filter, it is a really great little tool, but as with all things I would recommend not clouding up your chart too much with it. Know where you are, where price is in relation to the Keltner channel and then take it off the screen. Say, okay with the lower Keltner now where am I going to get involved, okay I want to get involved short for example here, let me see it unwind, if it unwinds a little bit 20 ticks or so, I have got to know I have got a bit of downside, because the lower Keltner has given me a little bit of room to breathe. Obviously, if news comes out, forget it. It is going to rip through all these levels and it is just going to do its own thing, which is why supply demand is the most important thing. If there is massive supply coming in you are going to see the market fall through the floor regardless of what your indicators are saying. Similarly, if there is huge demand coming in it is just going to rip to highs, no one is going to care what any oscillators and moving averages, Keltner channels are saying. Of course, that is where the power of volume comes in because we can see that we are in new volume territory, fresh highs, good volume coming in, holding above, everything is looking very good.
So, those are just a few of the tools of the trade, there are hundreds and hundreds and it is all about finding the one that best fits your personality and fits your style. What I will say is this, I know traders who use different types of indicators, I know guys who have made very good sums of money trading from one or two indicators, I don’t know anybody who has made good money from using loads of different indicators. So, that tells you something, it is that you find an indicator that fits your personality/style and trading method and then you stick with that and you don’t try and cloud it with different indicators because what will happen is you will get conflicting signals, because your moving average says buy, your oscillator says sell and you don’t know where you are. You need some conviction.
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🔴 Trading is Risky! 74 to 89% of retail investors lose money when CFD trading/spread betting!
✅ Check our website: http://www.financial-spread-betting.com/
✅ Please like, subscribe & comment if you enjoyed - it helps a lot!
What Are Bollinger bands and Keltner channels? http://www.financial-spread-betting.c... What Is The Difference Between Bollinger Bands and Keltner Channels
Let me run through Bollinger bands and Keltners.
Now, Bollinger bands and Keltners I like these, I don’t use these to make my trading decisions, however, they basically provide an envelope for price. They are very similar Bollinger band is based on a standard deviation, Keltner channel is based on an average true range. I personally prefer a Keltner channel, it doesn’t really matter, they do very similar things. What they are doing is they have an average price in the middle like a moving average and then around them you have an envelope based on a setting that you use. So, for Keltners I am going to use a 2.5 period or a 2 period and it is the same with Bollinger bands. They are going to give you a bracket to work around. The way that I use them is that if we are on a daily chart, I won’t chase price if we are at the upper band, you can see how often we tag the band and then that is it we roll back, or if we tag the lower band we don’t get much further we have to unwind a little bit, we have to retrace the mean, before we can get going.
So, if I am really interested in a market and it is right up a Bollinger band or up a Keltner, I am not going to go long, I am going to wait for it to at least retrace a little bit before I go long, because generally it will contain price, not always, you are going to get time periods where it does hug that upper Bollinger or lower Bollinger or upper Keltner or lower Keltner but I like to use it as a guide. I don’t use it so much on the lower timeframes, because you can stay out of it for such a long time, it is more powerful I think on the higher timeframes, like the 5 and the 15 minute, if you are day trading. So, you can see how it bounces up and down off the upper and lower Bollinger band.
Use it as a filter, it is a really great little tool, but as with all things I would recommend not clouding up your chart too much with it. Know where you are, where price is in relation to the Keltner channel and then take it off the screen. Say, okay with the lower Keltner now where am I going to get involved, okay I want to get involved short for example here, let me see it unwind, if it unwinds a little bit 20 ticks or so, I have got to know I have got a bit of downside, because the lower Keltner has given me a little bit of room to breathe. Obviously, if news comes out, forget it. It is going to rip through all these levels and it is just going to do its own thing, which is why supply demand is the most important thing. If there is massive supply coming in you are going to see the market fall through the floor regardless of what your indicators are saying. Similarly, if there is huge demand coming in it is just going to rip to highs, no one is going to care what any oscillators and moving averages, Keltner channels are saying. Of course, that is where the power of volume comes in because we can see that we are in new volume territory, fresh highs, good volume coming in, holding above, everything is looking very good.
So, those are just a few of the tools of the trade, there are hundreds and hundreds and it is all about finding the one that best fits your personality and fits your style. What I will say is this, I know traders who use different types of indicators, I know guys who have made very good sums of money trading from one or two indicators, I don’t know anybody who has made good money from using loads of different indicators. So, that tells you something, it is that you find an indicator that fits your personality/style and trading method and then you stick with that and you don’t try and cloud it with different indicators because what will happen is you will get conflicting signals, because your moving average says buy, your oscillator says sell and you don’t know where you are. You need some conviction.
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در تاریخ 1395/11/27 منتشر شده
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