Setup K1 Keltner Channels
The main indicators the K-1 uses for in and out positions are Keltner Channels and moving averages. Using Keltner Channels as the basis for this setup is intended to take advantage of opportunities created by price volatility, being widely used for short trades based on technical analysis.
On the other hand, a moving average, as the name implies, shows the average value of a given data. In the case of K-1 operations, it uses an exponential moving average, which, unlike the simple average, the exponential considers that the most current data have greater importance.
Brief useKeltner Channels and their central moving average are used to determine the entry and exit points. The recommended time frame is M1 (hence the name K-1, K of Keltner and 1 for 1 minute).
- Cross channel: The original setup consists of entering the market when the price crosses one of the channels. A sale is made when crossing the upper channel, on the other hand a buy is made when crossing the lower channel. The exit point can be on the moving average or across the other channel.
- Back to channel: This version can be considered more conservative, it allows you to enter the market first when the price closes outside the channel and then the next candle that closes inside the channel, the trade is executed at the market. The exit point can be on the moving average or across the other channel.
Normally the default parameters do not need to be changed, except the Deviation (more details below) is the most important to filter the volatility of the current symbol.
- Moving Average Period : The period of the central moving average. This average can define the exit point and the reactivation of the setup in case of loss. Changing this value can increase or decrease the distance between channels.
- Moving Average Method [Exponential]: Select the type of moving average calculation. As this is a scalping strategy, it is important to get price data more fast, so the default method is Exponential.
- Moving Average Price [Closing]: The default closing price of the moving average is used.
- ATR period : For the moving average to be centered within the channel, both the moving average period and the ATR period must be the same.
- ATR Multiplier (Deviation) [2.3]: Determines channel spacing. Depending on the symbol's volatility, it is important to define a compatible deviation to take advantage of market zigzags at the right time, avoiding unnecessary losses.
- ATR Mode [Calculate Using Range]: Type of ATR calculation.