Keltner Channel & Bollinger Bands 2 in 1

This script was made to visualize the differences between the Keltner and Bollinger bands .

Bollinger Bands

- The outer bands are based on the standard deviation of price fluctuations. Which means that the longer the candlesticks are, the wider the outer bands move away from each other.
- Bollinger Bands are most commonly used as a trend-following indicator. When the price stays close to the outer bands, it signals a strong trending market.
- Bollinger Bands can also be used to find reversal trading opportunities, especially when the price fails to hit the outer bands after a trending period and then turns to the opposite side of the bands.

Keltner Channel

- The Keltner Channel is based on the ATR ( Average True Range ) indicator. Thus, the Keltner Channel projects the true width of the price range.
- Similarly to the Bollinger , the Keltner Channel signals a strong trending market when the price is able to reach the outer bands. Such a signal confirms that the current price move exceeds the length of the previous price movements
- When the price fails to reach the outer Keltner band, it signals that the price movements are becoming shorter.

Some rules that can be used for trading
For long : when we close above the upper band. we exit when we close down the middle band.
For short: when we close below the lower band , we exit when close above the middle band.

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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