How to Trade Breakouts Using Keltner Channels.

Now let’s examine how to trade breakouts using Keltner channels.

Breakouts from the Keltner Channel act as strong hints where the price is running off to next.

If the candles start to break out above the TOP, then the move will usually continue to go UP.

If the candles start to break below the BOTTOM, then the price will usually continue to go down.

Keeping an eye out for these channel breakouts can help you catch a big move as early as possible.

Keltner Channels show the area where a currency pair normally hangs out.

The channel top typically holds as a dynamic resistance while the channel bottom serves as dynamic support.

The most commonly used settings are 2 x ATR (10) for the upper and lower lines and EMA (20), which is the middle line.

This middle line is pretty significant since it tends to act as a pullback level during ongoing trends.

In an UPTREND, the price action tends to be confined in the UPPER HALF of the channel, which is between the middle line as support and the top line as resistance.

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