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The JMA Keltner Channel indicator is a trend trading algorithm based on the interaction of several forex indicators, namely the modification version of the moving average, the Keltner Channel indicator and the use of the ATR indicator as an additional filter. The indicator itself is used for trend trading, and its calculations are aimed at determining its current direction and strength, which in turn allows determining the moment of opening a trade. It is displayed directly in the main window of the price chart in the form of a channel consisting of three lines. The current values of the indicator serve as a signal that determines the current trend.
The JMA Keltner Channel indicator is suitable for trading any currency pair on any timeframe.
Input parameters
There are several sections in the indicator settings. Thus, the Input Parameters section is used to change the values of its technical work, and the Colors section is used to change the visualization, namely the thickness, color range of its lines.
-Period - value of the indicator calculation period. The default value is 14.
-Price - type of the price to which the indicator calculations are applied. By default, it has the Typical price value.
-ATR period - calculation period of the ATR indicator. The default value is 14.
-Channel multiplier - indicator channel value multiplier. Default value is 1.5.
Indicator signals
The JMA Keltner Channel indicator is very easy to use and its operation algorithm is similar to other similar channel indicators. To open a certain trade, the direction and strength of the current trend is first determined. To do this, in turn, one should take into account the indicator values, namely the direction of its lines, color its borders and the location of the candle relative to its middle line. If the current trend is upward, long positions are opened, if the trend is downward, short positions are opened. In both cases, when the trend changes, trades are closed.
Signal for Buy trades:
- The indicator lines are moving up and its upper and lower lines are colored with the growth value. The current candle closes above its middle line.
Upon receipt of such conditions, a buy trade can be opened on the signal candle, due to the presence of an upward trend in the current market. It should be closed upon receipt of the opposite conditions, namely, when the direction of its lines changes. At this moment, one should consider opening new trades.
Signal for Sell trades:
- The channel of the indicator goes from top to bottom, while its borders are colored with the value of the fall. The current candle closes below its middle line.
A sell trade can be opened immediately upon receipt of such conditions on a signal candle. At this moment, a downward trend is determined in the market. The current trade should be closed and a new one should be opened upon receipt of the opposite conditions from the indicator, namely when its channel direction changes. At this moment, it is possible change in the current trend.
Conclusion
The JMA Keltner Channel indicator is a very effective mini strategy consisting of time-proven indicators. In addition, the indicator is very easy to use and suitable even for beginners. Before using the indicator on a real deposit, it is recommended to use a demo account.
