Skip to content Skip to sidebar Skip to footer

Keltner Bulls Bears Momentum Forex Trading Strategy

Momentum trading is one of the most popular ways to trade in the forex market. Many profitable retailers use momentum trading strategies to take advantage of strong market moves.

Momentum trading strategies are popular because they allow traders to earn huge returns from the trading setups they provide. It is not uncommon to see a trade setup that results in a trade that is more than three times the stop loss risk when using a momentum trading strategy. This high potential risk of reward allows traders to earn huge profits in the long run.

Momentum trading setups can be very profitable. However, it also has its pitfalls. Momentum traders are often guilty of chasing price. Momentum traders usually will not hesitate to enter a trade even when the price is clearly stretched. This is one of the main sins of trading, chasing prices. Momentum traders also tend to enter trades without considering where the price is on the price chart.

The key to a momentum trading strategy is to take trades that result from market bottlenecks. This is because the market moves in cycles. This cycle can be either a market contraction or a market expansion. Entering a trade based on a sudden flow of volume pushing the price in one direction indicates that the market is exiting the market contraction phase and is starting to expand. This increase in volatility, if found to be one-sided, would mean huge gains for momentum traders.

The Keltner Bulls Bears Momentum Forex trading strategy is a strategy that systematically provides trading settings based on the sudden entry of momentum right after the contraction phase. It uses a variety of indicators to help traders filter trades based on market distortions and identify potential momentum breakouts.

Keltner channel

The Keltner channel is a versatile technical indicator that can be used for a variety of purposes. It is a trend following indicator that can be used to identify volatility, momentum, and mid-reversals.

The Keltner Channel indicator draws three lines on the price chart. The center line is basically the exponential moving average (EMA) line, usually set to 10 or 20 calculation periods. The outer line is the deviation from the EMA line based on the Average True Range (ATR), which is usually set at twice the ATR. These lines create channels or band-like structures, similar to Bollinger Bands or Donchian Channels.

Since the center line of the Keltner Channel is the 20-bar EMA line, it is also a great tool for identifying trend direction. Traders can identify the direction of the trend or bias based on the slope of the 20 EMA line or the location of the price in relation to the 20 EMA line.

Outlines can be used in a variety of ways. First, it can be used to identify momentum breakouts. A momentum candle that closes outside the channel may indicate a potential momentum breakout in the market. On the other hand, price action showing signs of price rejection pushing the outer lines of the Keltner Channel could indicate a possible mid-reversal market condition.

Apart from these two main uses of the Keltner Channel outline, traders can also use these two lines to identify volatility. Since these lines are calculated based on the ATR, traders can also tell if the volatility is strong or weak.

BS trend indicator

The BS Trend Indicator is a market direction indicator designed to help traders see the general direction of the market. It identifies market distortions based on trends.

It identifies whether the market is a buyer's or seller's market based on trends. The bars are then drawn to indicate the direction of the market. The bar is -0.0001 or 0.0001. Positive bars indicate a bullish market bias, while negative bars indicate a bear market bias.

This indicator is mainly used as a filter for market distortions. Traders can filter out trade settings that are not aligned with the BS Trend market bias.

Traders can also use it as a trade entry or exit trigger. Traders can interpret a bar movement as a possible trend reversal and use it to enter or exit a trade.