Keltner Channel Breakout¶
What it does: Buys a break above the upper Keltner band when a trend is confirmed; exits at the middle. Keltner Channels draw bands a few times the normal price swing (ATR) around the 20-candle average. This buys when the price closes above the upper band while ADX (trend strength) is above 25.
Style: Breakout · Difficulty: Beginner · Risk: medium · Ready: 2 of 2 variants
When people use it: It tends to work when a trend continues after the breakout.
Where it struggles: It struggles in sideways markets (false breakouts). Volatility spikes widen the channel.
Markets it was written for: BTC, ETH, majors. Timeframes: 4h (1h-1d).
Open it in the Strategy Library (on the Strategies page), pick a variant, adjust the settings and press Add to my strategies. It becomes your own strategy: edit, backtest or trade it like any other.
Long¶
Buys a break above the upper Keltner band when a trend is confirmed; exits at the middle.
Labels: Breakout, Long, Spot, Beginner, Medium
- Direction: Buy (long) · Market: spot
- Trigger: On candle close · Main timeframe: Auto (4h)
Entry
- IF Price crosses above KC(20,2) Upper band (4h) and ADX(14) > 25 (4h)
Exit: Indicator-Based Exit
- IF Price touches KC(20,2) Basis (4h)
- Loss controls: Stop-loss % 5%
Settings
| Setting | Default | Editable | What changing it does |
|---|---|---|---|
| Channel length | 20 | Yes (sets 2 fields) | How many candles the channel's average is based on. Shorter follows the price closer (more breakouts); longer is smoother (fewer). Changes the entry band and the middle-line exit together. |
| Keltner band width | 2 | Yes (sets 2 fields) | How far the bands sit from the middle. Lower means smaller moves count as breakouts (more trades, more false ones); higher waits for bigger moves. Changes the entry band and the middle-line exit together. |
| ADX threshold | 25 | Yes | How strong the trend must be. Higher trades less and only in strong trends; lower trades more often. |
How it works (as shown in the app)
- Keltner Channels draw bands a few times the normal price swing (ATR) around the 20-candle average. This buys when the price closes above the upper band while ADX (trend strength) is above 25.
- It sells when the price touches the middle line, or at the stop-loss.
- It tends to work when a trend continues after the breakout.
- It struggles in sideways markets (false breakouts). Volatility spikes widen the channel.
- Built for 4-hour candles (1 hour to 1 day also work).
Short (perp)¶
Shorts a break below the lower Keltner band when a trend is confirmed; closes at the middle.
Labels: Breakout, Short, Futures, Medium, Backtest Only
- Direction: Sell (short) · Market: swap
- Trigger: On candle close · Main timeframe: Auto (4h)
Entry
- IF Price crosses below KC(20,2) Lower band (4h) and ADX(14) > 25 (4h)
Exit: Indicator-Based Exit
- IF Price touches KC(20,2) Basis (4h)
- Loss controls: Stop-loss % 5%
Settings
| Setting | Default | Editable | What changing it does |
|---|---|---|---|
| Channel length | 20 | Yes (sets 2 fields) | How many candles the channel's average is based on. Shorter follows the price closer (more breakouts); longer is smoother (fewer). Changes the entry band and the middle-line exit together. |
| Keltner band width | 2 | Yes (sets 2 fields) | How far the bands sit from the middle. Lower means smaller moves count as breakouts (more trades, more false ones); higher waits for bigger moves. Changes the entry band and the middle-line exit together. |
| ADX threshold | 25 | Yes | How strong the trend must be. Higher trades less and only in strong trends; lower trades more often. |
How it works (as shown in the app)
- Keltner Channels draw bands a few times the normal price swing (ATR) around the 20-candle average. This shorts when the price closes below the lower band while ADX (trend strength) is above 25.
- It buys back when the price touches the middle line, or at the stop-loss.
- It tends to work when a downtrend continues after the breakdown.
- It struggles in sideways markets (false breakdowns). Volatility spikes widen the channel.
- Built for 4-hour candles (1 hour to 1 day also work).
- Shorting means you profit if the price falls and lose if it rises.
- Suggested leverage is at most 3x. On isolated margin, at 3x the exchange closes the position (liquidation) if the price moves about 33% against you, and you lose the margin you put into it. Keep your stop well inside that.
- For now this version runs in backtests only; paper and live futures trading are coming later.
Warnings¶
- "Backtest only for now: paper and live trading of shorts are coming later.": shown on short variants. They need perpetual or futures pairs.
- Some variants suggest leverage. On isolated margin a liquidation loses the margin in that position; keep any stop well inside the liquidation distance (the Trade Builder warns you when it isn't).
- Once added, the strategy's conditions get the usual condition checks. Messages show under each condition on the entry / exit conditions screen; setting errors start with the indicator's short name (for example "MACD: Fast must be between 1 and 1000") and block saving, while the other warnings never block saving and repeat in the strategy's Entry or Exit section. See the indicator pages below for each one.
- "You already have this strategy with these settings (…). Change a setting to add another copy.": shown on the variant's page in the Strategy Library when you already added this variant with the same settings.
Good to know¶
- After you add it, the strategy keeps the library's trigger and an Auto main timeframe; you can change both in the builder. Nothing links it back to the library, except that the builder still shows the library's explanations in the info bubbles.
- Changing a setting before adding it also changes the saved name, so you can tell copies apart.
- Past results don't predict future ones. Try it in a backtest and on paper before using real money.
- Indicators used: ADX, KC.