Keltner channel

The indicator is named after Chester W. Keltner (1909–1998) who described it in his 1960 book How To Make Money in Commodities.

This name was applied by those who heard about it from him, but Keltner called it the ten-day moving average trading rule and indeed made no claim to any originality for the idea.

[1] In Keltner's description the center line is a 10-day simple moving average of typical price, where typical price each day is the average of high, low and close,[2] The lines above and below are drawn a distance from that center line, a distance which is the simple moving average of the past 10 days' trading ranges (i.e. range high to low on each day).

The trading strategy is to regard a close above the upper line as a strong bullish signal, or a close below the lower line as strong bearish sentiment, and buy or sell with the trend accordingly, but perhaps with other indicators to confirm.

[citation needed] But ideas of channels with fixed widths go back to the earliest days of charting, so perhaps applying some averaging is not an enormous leap in any case.