KC Indicator
KC Indicator is a technical tool that belongs to trend channels category of indicators. The indicator can be used to identify trend and support and resistance levels.
Description
The KC indicator (Keltner Channels) belongs to the category of trend channel indicators. The price chart of a currency pair displays several price channels built using moving averages and the ATR value.
Forex KC indicator settings allow you to assign a certain coefficient to the price channel, which makes it possible to narrow or expand this channel.
What is the KC Indicator?
Naturally, the oscillatory movements caused by market volatility have become an excellent opportunity for building various channel strategies.
However, the classic channel design has a huge weakness; channels are static. The channel is built taking into account market volatility and has a dynamic value.
The KC indicator is a multi-currency instrument, so the choice of timeframe depends solely on the trader’s preferences. ATR channels can be used on any timeframe, so the indicator can easily be made an integral part of both scalping and long-term strategies.
Key features and benefits of Keltner Channels Indicator
The indicator builds a kind of channel from lines, the boundaries of which act as strong support and resistance levels.
In practice, these lines are used in a similar way to level trading. Namely, you need to trade both on the breakdown of levels and on their rollback.
The channel direction angle indicates the direction of the trend. If the channel is directed upwards, positions are opened only for buying, if downwards – only for selling. If the channel is directed horizontally, the market is flat, so it is worth trading on a rebound from the opposite boundaries of the channel.
It is also worth noting that you can easily place both stop orders and take profit by channel level.
Conclusion
The Keltner Channels indicator is a great tool for technical analysis. It can be used to identify market trends and phases. The tool is equally good for both scalpers and long-term traders. However, like any other tool, the ATR Channel indicator may not always be a winning strategy. Hence, you are advised to use any other confirmation tool to increase the chances of success in your trading.