Keltner Channels or Bollinger Bands?

This is a discussion on Keltner Channels or Bollinger Bands? within the Technical Analysis forums, part of the Methods category; Hey folks, Was doing a bit of reading on various indicators and I am aware that Keltner Channels are based ...

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Old Dec 27, 2017, 3:05pm   #1
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Keltner Channels or Bollinger Bands?

Hey folks,
Was doing a bit of reading on various indicators and I am aware that Keltner Channels are based on Average True Range, while Bollinger Bands is based on Standard Deviation.

For those of you that use 1 of these...
Why use one over the other?
Or
If you use both, how do you determine which to use at a given time?


Thanks in advance!
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Old Dec 27, 2017, 4:33pm   #2
 
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i tried both more than a few times...trying to fade i can't use either they don't help me. a trend just kills me can you help me use them effectively?
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Old Dec 27, 2017, 5:11pm   #3
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Originally Posted by piphoe View Post
i tried both more than a few times...trying to fade i can't use either they don't help me. a trend just kills me can you help me use them effectively?
Are you just using that solely as your trigger for a trade?

When I use them I am looking for price to leave the channel but I am also looking at previous price structure to inform my view on where price might go or where price might struggle. In forex, fundamentals are quite important too, so that's another indicator that you need to keep in mind.

I am a fan of mean reversion trading, so when a trade is highlighted to me by the band/channel, my target is the mean of the channel (middle line of the 3)

It's still too early for me to know what's what, so be careful when listening to anything I say as it's influenced by a level of naivety.

Roughly speaking, I look for the direction that fundamentals indicate a particular pair is going in and then take setups to that side. So if for example the GBP/JPY fundamentals indicate to me that the GBP is stronger, then I will look for where price pops outside of the channel to the downside and then I go long. Targeting the mean

Perhaps those who actually know how to trade properly can give you a better answer
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Old Dec 27, 2017, 5:29pm   #4
 
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Quote:
Originally Posted by Nowler View Post
Are you just using that solely as your trigger for a trade?

When I use them I am looking for price to leave the channel but I am also looking at previous price structure to inform my view on where price might go or where price might struggle. In forex, fundamentals are quite important too, so that's another indicator that you need to keep in mind.

I am a fan of mean reversion trading, so when a trade is highlighted to me by the band/channel, my target is the mean of the channel (middle line of the 3)

It's still too early for me to know what's what, so be careful when listening to anything I say as it's influenced by a level of naivety.

Roughly speaking, I look for the direction that fundamentals indicate a particular pair is going in and then take setups to that side. So if for example the GBP/JPY fundamentals indicate to me that the GBP is stronger, then I will look for where price pops outside of the channel to the downside and then I go long. Targeting the mean

Perhaps those who actually know how to trade properly can give you a better answer
no worry appreciate your reply! hopefully few others will help here
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Old Dec 28, 2017, 2:44pm   #5
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Nowler started this thread Further to my initial post:

Are Bollinger Bands/Keltner Channels better suited to particular FOREX timeframes?
I ask because there are news releases very often, as in, fx is largely driven by news/economic policy, so perhaps this means that BB's/Keltner's are better suited for lower TF's as opposed to higher.

My logic here is that the longer the TF the more potential for a release of some sort to change sentiment. So using it (when price leaves the channel) would perhaps be better on a 1-4hr TF than say 1D or weekly...? Because the shorter the TF, the more chance I can get in and out before a release steamrolls me
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Last edited by Nowler; Dec 28, 2017 at 2:49pm.
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Old Dec 30, 2017, 4:31pm   #6
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Nowler started this thread Just going to bump this one last time before I let it die.

Perhaps those who use them or know a lot about them have been busy eating turkey and ham sandwiches
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Old Dec 30, 2017, 5:22pm   #7
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Quote:
Originally Posted by Nowler View Post
. . . Why use one over the other?
Or
If you use both, how do you determine which to use at a given time?
Hi Nowler,
There are hundreds upon hundreds of indicators out there, almost all of which come with default settings that each trader tweaks in an attempt to find the magic combo' that unlocks the door to untold riches. Add in the use of two or more indicators together and that makes the possible number of permutations almost infinite.

Now, you can go from one indicator to the next in search of the holy grail if you want - but I wouldn't recommend it. It's much better IMO to start at the end and work backwards. That way, you'll stand a much better chance of finding the right indicator and being able to determine the right settings for the job. So, for example, suppose you want a way to determine where to place your stops that isn't just above or below swing highs and lows - or obvious areas of S&R - which is where most traders put them. And you want to take volatility into account so that your stop is dynamic and in sync with the instrument you're trading. In this example, Keltner Channels may be helpful and are certainly worth considering.

Putting any and all indicators in a vacuum and trying to decide which is best is largely pointless because, without context, no indicator is any better or worse than any other. This assumes obviously that you feel indicators at least have some merit and aren't the spawn of the devil! So, to conclude, I suggest you answer this question: what is it that I want the indicator to do - what am I trying to achieve? Once you've got that answer, then finding the indicator that does what you want will be a whole lot easier.

If you've already done as I suggest and have boiled your choice down to Keltner Channels or Bolly Bands - then this article compares and contrasts the two.

Hope all that makes sense.
Tim.
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Old Dec 30, 2017, 5:50pm   #8
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Nowler started this thread Yes, that makes sense.
I'll make a cuppa and have a read of the link you gave me.

Thanks very much mate.
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