Double Keltner ATR Bands Scalping System For MT4
Table Of Contents:
- Double Keltner ATR Bands Scalping System For MT4
- The Double Keltner ATR bands scalping system – Long positions
- The Double Keltner ATR bands scalping system – Short positions
- Is Double Keltner ATR bands scalping system good for you?
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Double Keltner ATR Bands Scalping System For MT4 is a rather simple forex trading strategy that is suited for trading the short term charts. However, by twisting the rules a bit traders can also use this trading system as a way to trade the long term charts.
At the very core, the Double Keltner ATR bands scalping system makes use of the trend as the driving force behind the trading signals. Following this, based on the Keltner channels that are used in the trading system, one can then scalp the markets.
The Double Keltner ATR bands scalping system makes use of two indicators only. The first is obviously the Keltner channel, while the second is the stochastics oscillator. On the price chart, we have two instances of the Keltner channels. The first indicator is set up with a period setting of 50 and an ATR range of 3.75. The second instance of the Keltner channel uses the setting of 50 and an ATR range of 2.75. Together, both the Keltner channels form a price channel band. Support and resistance levels are formed near the boundaries of the two Keltner channels.
The Keltner channel is rather unique because it makes use of the average true range or the ATR values. Depending on the ATR value, the Keltner channels plot the values. Thus, in a way, the Keltner channels plot the average range or the difference between the high and low values of price.
When price tends to move into one of the extremes and thus breaking the outer bands, you will often find price moving back inside the band. Thus, with two Keltner channels, we have the bands limited to 2.75 and 3.75 values of the ATR indicator.
In the sub window, we have the Stochastics oscillator. The Stochastics is basically a momentum oscillator. It shows when the price momentum is rising or falling during the trends. Therefore, when you combine the above indicators, you get the Double Keltner ATR bands scalping system. As you might have guessed by now, we trade the Keltner channel bounce. This is when price tends to move to one extreme and bounced back to the other extreme.
These price movements are nothing but short term movements in the price within the trend. While we use the Double Keltner ATR bands scalping system on the 15 minute chart, you can also apply this trading system on higher chart time frames.
The main difference is that instead of scalping the short term bounces in price, you would be trading with the trend. This occurs when price typically breaks the Keltner channel and moves steadily into a trend. Over a period of time, the Keltner channels automatically adjust and then engulfs the price back into the channel.
With momentum and trend, you basically have a very good trading strategy at hand. Let's now take a look at how you can trade long and short positions using the Double Keltner ATR bands scalping system.
The Double Keltner ATR bands scalping system – Long positions
For long positions using the Double Keltner ATR bands scalping system, we start by looking at divergence that forms when price is trading near the lower end of the Keltner channel. After you see price making a lower low, look to the Stochastics oscillator to form a higher low.
When you spot this bullish divergence, take a long position at market and set your stop loss to the first Keltner channel’s upper band. For stop loss, use the low from the divergence and set the stop loss a few pips below this level.
It is also helpful if you see some bullish engulfing or other similar candlestick patterns just before you take a long position. This will ensure that your trade will close in the profit with higher probability. When price moves somewhere to the middle of the Keltner channel, move your stop loss to break even.
The Double Keltner ATR bands scalping system – Short positions
For short positions using the Double Keltner ATR bands scalping system, we start by looking at divergence that forms when price is trading near the upper end of the Keltner channel. After you see price making a higher high, look to the Stochastics oscillator to form a lower high.
When you spot this bearish divergence, take a short position at market and set your stop loss to the first Keltner channel’s lower band. For stop loss, use the high from the divergence and set the stop loss a few pips above this level.
It is also helpful if you see some bearish engulfing or other similar candlestick patterns just before you take a short position. This will ensure that your trade will close in the profit with higher probability. When price moves somewhere to the middle of the Keltner channel, move your stop loss to break even.
Is Double Keltner ATR bands scalping system good for you?
In conclusion, the Double Keltner ATR bands scalping system is a rather simple but a robust forex trading system. You can use this on both the short term or the long term charts, by adjusting where you enter into the trade.
Traders using this trading system on the short term chart will find it enjoyable to trade with the Double Keltner ATR bands scalping system. The price charts are very clean and if you like to trade with price action, you could apply the concepts of price action alongside the existing rules as well. For example, you could look at bullish or bearish candlesticks pattern that might emerge when price is trading near one of the outer Keltner channels.
This way, you can increase the confidence in your trades. The Double Keltner ATR bands scalping system is ideally suited for traders at all levels. However, beginners will need to spend some time in getting more practice using this trading system.
The template that comes with the Double Keltner ATR bands scalping system is very light weight. So you can easily use the template to monitor multiple instruments simultaneously. Note that the signals do not come that frequently, therefore, traders need to be patient when trading with the Double Keltner ATR bands scalping system.
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