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Customizable Keltner is a trading algorithm based on the calculations of the Keltner Channel indicator, a Forex trend indicator. The indicator's calculations are aimed at determining the direction of the current trend and opening trades at that moment. Like the standard version, Customizable Keltner is presented in the main window of the price chart as a channel, consisting of three lines, while the lines of all three lines of the indicator are moving averages with different types of smoothing. This makes the indicator more accurate and efficient in calculations. Depending on the direction of the lines, the current trend is determined, and depending on the location of the signal candle relative to these lines - optimal moment of opening positions.
When using the Customizable Keltner indicator, any currency pair and timeframe can be used.
Input parameters
The settings of the Customizable Keltner indicator consist of six input parameters, each of which affects its general functioning and technical work. While the Colors section serves to change the overall visualization and color scheme of the indicator lines.
- Number of the periods to smooth the central line - the period for smoothing the central line of the indicator. The default value is 50.
- Number of periods to smooth deviation - the period for smoothing the current deviation of the indicator values from the standard. The default value is 50.
- Factor which is used to apply the deviation - an indicator of the current deviation of the indicator values. The default value is 1.0.
- The center line applied price - the type of price used to calculate the middle line of the indicator. Close price by default.
- The center line smoothing method - parameter for smoothing the center line of the indicator. The default value is Simple.
- Variation Method - type of smoothing the borders of the indicator channel. The default value is Smoothed H-L.
Indicator signals
The Customizable Keltner indicator is used in trading like other channel indicators. That is, to open a certain trade using the indicator, one should take into account the direction of the channel itself and the location of the signal candle relative to it. If an upward trend is detected on the market, long positions are opened, and if the trend is downward, short positions. Positions should be closed when the direction of the current market trend changes.
Signal for Buy trades:
- The indicator channel moves from bottom to top. The signal candlestick opens above the middle line of the indicator, while crossing the upper border of the channel.
Upon receipt of such conditions, a buy trade can be opened on a signal bullish candle. At this moment, an uptrend is determined in the market. When it changes, namely at the moment of changing the direction of the channel, a possible change in the trend is determined, which in turn allows considering the opening of new trades.
Signal for Sell trades:
- All three lines of the indicator move from top to bottom, while the signal candle should be below the middle line of the indicator and cross its lower border.
Upon receipt of a combination of such conditions on a signal bearish candle, a sell trade may be opened, due to the presence of a downtrend in the current market. Such a trade should be closed upon receiving the opposite conditions from the indicator, which in turn will indicate a possible change in the current trend, which will allow considering the opening new trades.
Conclusion
The Customizable Keltner indicator is a very effective and profitable modification of the standard Keltner Channel indicator, thanks to which it is quick and easy to trade during a certain trend. Although the indicator is very simple and easy to use, preliminary practice on a demo account is recommended to gain the necessary trading skills.
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