The Frontiers Of Trading

By:  Ivan Cavric   Keltner Channels is a popular technical indicator that can be used to identify overbought and oversold conditions in the market. It was developed by Chester W. Keltner in the 1960s and is based on the principle of using a moving average and a range-based calculation to create upper and lower bands around price action. The Keltner Channel consists of three lines: The middle line, which is a moving average of the price action. The upper line, which is calculated by adding the average true range (ATR) of the instrument to the middle line. The lower line, which is calculated by subtracting the ATR from the middle line. The ATR is a measure of volatility and is calculated by taking the average of the true range over a specified period. The true range is the greatest of the following: The difference between the current high and the previous close. The difference between the current low and the previous close. The difference between the current high and the current...

by: Ivan Cavric Short-term day trading involves buying and selling securities within a single trading day. As a result, traders must be able to quickly identify trends and make informed decisions to maximize profits. In this fast-paced environment, using a moving average can be a helpful tool to assess market trends and make informed decisions. One of the most popular and effective moving averages used by short-term traders is the 6-period and 18-period smoothed moving average. This combination is considered the best because it strikes a balance between sensitivity and smoothness. The 6-period moving average is a highly sensitive indicator that can quickly detect short-term price changes. This is especially important for day traders who are looking for quick profits. However, a highly sensitive indicator can also lead to false signals, causing traders to make poor decisions. The 18-period moving average provides a smooth representation of the trend and eliminates short-term fluctuati...