Keltner Channel Stops is a modification of the BBStop indicator that uses the Keltner Channel calculation method.
The reason for this modification is that ATR values are more widely used by traders for setting stop-loss and take-profit levels than standard deviation, which is used in the calculation of Bollinger Bands. In most cases, identical periods will result in narrower levels for stops.
Keltner Channel Stops is recommended for placing stop-loss orders and, if desired, as a reference for trailing stops. A break above the line can be interpreted as a trend reversal. In such a case, the indicator can be used as a trend filter.
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FAQ
What is the Keltner Channel Stops indicator?
The Keltner Channel Stops indicator is a modified version of the BBStop indicator that uses the Keltner Channel calculation method to set stop-loss and take-profit levels.
How does the Keltner Channel Stops work?
This indicator helps traders place stop-loss orders and use trailing stops. A break above the channel line can indicate a trend reversal, making it useful as a trend filter.
Why is ATR preferred over standard deviation in this indicator?
ATR (Average True Range) is more commonly used by traders for setting stop-loss and take-profit levels compared to standard deviation, which is used in Bollinger Bands calculations.
