Keltner Channels

Channels drawn around a moving average of typical price (High + Low + Close) / 3.

A moving average (10 or 20-period) of the typical price [(High + Low + Close)/3] is used to construct the midline (not displayed on chart). Then the average true range is calculated over a time period (same as midline, 10 or 20-period) and multiplied by a multiple (usually 1.5); the calculated number is then added to the midline to form the upper Keltner Channel and subtracted from the midline to form the lower Keltner Channel.


Read more on Wikipedia.