Raschke’s version of KB
Linda Raschke maintains that Keltner Bands are of greatest value in determining runaway market conditions, often referred to as accelerating trends or blowoffs, when retracements are likely to be extremely short or non-existent. Keltner Bands alert traders that normal trading techniques, such as buying on dips, should be adjusted to fit the changed circumstances.
The two versions of Keltner Channels are:
- Keltner Channels (Original), using Keltner’s first published settings: a 10-day simple moving average ofTypical Price and 10-day average daily range (high – low) with a multiple of 1; and
- Keltner Channels, the more popular version from Linda Raschke: a 20-day exponential moving average ofClosing Price and a multiple of 2.5 times 20-day Average True Range.
Separate multiples of ATR can be plotted for the upper and lower bands.
The original formula used a simple moving average of Typical Price, (High + Low + Close) / 3, but Linda Raschke’s version dispensed with Typical Price, as the exponential moving average provides sufficient smoothing on its own. Here is the formula for the later, simplified version:
Upper Band = Exponential MA of Closing Price + multiple of Average True Range
Lower Band = Exponential MA of Closing Price – multiple of Average True Range
Keltner Channels are a useful enhancement for eliminating whipsaws when trading trends with a moving average system.
List of indicators
Here is a list of indicators that Linda Raschke most often uses in his trading and analysis:
1. Oscillator 3-10. “Oscillator 3.10 I use since 1981.” She says. “This is the difference between the three-day simple moving average and the 10-day simple moving average. Plus, there is a second line, which is a 16-period simple moving average of the line 3-10. On schedule, I usually use MACD, changing the parameters of exponential moving averages to simple moving averages and the length of 3, 10 and 16.
2. 14-period ADX. This indicator is used to measure the strength of the trend.
3. Keltner Channels, which are trading bands, consisting of lines placed on the 2.5 average true range on both sides of the 20-period exponential moving average.
4. 2-period ROC indicator on the daily charts.
5. Latitude closing: 10-period SMA of the stock minus the lower elevations.
6. The ratio of supply to demand. Linda Raschke uses pyatiperiodnuyu simple moving average of the ratio of demand and supply. This is usually an indicator TRIN.
Both experienced and novice traders spend a lot of time trying to identify the model on the markets – charts and indicators on a set of time scales, seasonal trends at certain times of the month or year, the mood and data flow of the various funds. It is clear that there are many different ways to analyze markets. Analyzing the model, the trader is looking for sufficient reason to conclude a deal or get out of the existing one. Shopping monitored to detect subtle changes in the underlying balance of supply and demand, and once observed “initial condition”, which refers to a situation where there is a chance for profit, trade becomes a matter of simply clicking on the “trigger” to enter the market, determining the initial level of risk and then trade management properly in response to market action. Professional trader manages trading, watching for confirmation or confirmation of its assumptions.
But why trade has never seemed so easy in real life? In the end, it’s only a game of numbers and do not require so much time to learn the basic rules. Perhaps this is because trade is generally 10 per cent consists of studying the market and 90 percent of the study itself.
Unfortunately, if the trader does not know himself, the markets – this is a very expensive place to learn. If traders shone half the time they spent on market research to examine their own behaviors, benefits would be much greater than that of access to any training courses, videos, system or technical book ever written about the markets.
The trade balance suffers when those transactions are not concluded, the plan of trade is not respected and carried out “voluntary” mistakes “. Fortunately, traders can learn to recognize those personal behaviors that lead to loss of attention and concentration, in addition to other bad habits.