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KELTNER BANDS
were first introduced in the book How To Make Money in Commodities,
by Chester W. Keltner and is an envelope following price movements.
Using them we can have m o v i n g support and resistance lines
continuously, not only when and if a straight line exists.
With Amibroker built-in functions Keltner Bands are easily
impemented :
KUP=EMA((H+L+C)/3,10)+EMA(H-L,10);
KDOWN=EMA((H+L+C)/3,10)-EMA(H-L,10);
AN APPLICATION
When price crosses its support KDOWN it is better (for long
positions) to stay out of the market until a promising cross takes
place. This is emphasized in the following AFL code :
maxgraph = 5;
KUP=EMA((H+L+C)/3,10)+EMA(H-L,10);
KDOWN=EMA((H+L+C)/3,10)-EMA(H-L,10);
graph1 = KUP;
graph0 = close;
GRAPH2=EMA((H+L+C)/3,10);
graph2style=1;
graph3 =KDOWN;
graph0barcolor=1;
graph2barcolor=3;
graph3barcolor=3;
graph1barcolor=3;
OUT=C;
GRAPH4=OUT;
GRAPH4STYLE=2;
GRAPHXSPACE=0.5;
GRAPH4BARCOLOR=IIF(C<KDOWN,15,0);
For a simple trading system you may add
BUY=CROSS(C,KDOWN);
SELL=CROSS(KUP,C);
Dimitris Tsokakis
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