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Chart indicators
Donchian Channel vs Keltner Channel and Envelopes: Bands Compared
A Donchian channel plots the highest high and the lowest low over a set number of bars, with a 20-bar default in StockCharts. A Keltner channel sets bands a multiple of the average true range away from a moving average. A moving average envelope sets bands a fixed percentage away from a moving average. All three describe past prices.
In brief
What is a Donchian channel, and how does it differ from Keltner channels and envelopes?
Three band indicators look alike on a chart but measure different things. Here is how a Donchian channel, a Keltner channel and a moving average envelope are built, and where the defaults differ.
Key takeaways
- A Donchian channel tracks the highest high and lowest low over a lookback period, 20 bars in the StockCharts default. Its width depends on the range of recent extremes.
- A Keltner channel sits a multiple of the average true range (ATR) above and below a moving average. Its width reacts to volatility, and its centre line is usually an exponential moving average.
- A moving average envelope sits a fixed percentage above and below a moving average. Its width scales with the average price, not with volatility.
- Defaults differ between sources. StockCharts gives a 20-period EMA with ATR(10) and a multiplier of 2 for Keltner channels, while the TradingView support page states a length of 20 but not an ATR length.
- All three bands are calculated from past prices. A band touch shows where price is relative to the band, not where price will go next.
How a Donchian channel is built
StockCharts attributes the Donchian channel, also called a price channel, to Richard Donchian. Its upper line is the highest high over the lookback period, and its lower line is the lowest low over the same period. The StockCharts default is 20 periods, and it sets the centre line at the average of the two extremes: (20-period high + 20-period low) / 2.
Because the bands are the extremes of the window, a Donchian channel widens when recent bars include a large high or low and narrows when the recent range is small. It does not average price. The StockCharts formula does not include the most recent period, so a new extreme enters the band from the following bar. Traders often use it to see where price sits within its recent range. For a related view of range edges, see support and resistance.
How a Keltner channel is built, and its original version
A modern Keltner channel has three parts: a centre line, an ATR-based width and a multiplier. The StockCharts version uses a 20-period exponential moving average as the centre line, then adds and subtracts 2 times the 10-period average true range. The average true range guide explains that ATR measures volatility, and the exponential moving average guide covers the centre line.
The original method is older. StockCharts describes Chester Keltner's version as a 10-day simple moving average of typical price, with the 10-day simple moving average of the high-low range added and subtracted to form the bands. TradingView's support page says the basic idea was introduced by Chester Keltner in his 1960 book, and it credits Linda Bradford Raschke with the EMA centre line and ATR bands.
How moving average envelopes are built
A moving average envelope is the simplest of the three. It takes a moving average, either simple or exponential, and sets an upper and a lower line at a fixed percentage from it. StockCharts describes the envelope as percentage-based, with the example using a 20-day simple moving average and a 2.5% envelope. Its formulas are the average plus or minus the average multiplied by 0.025.
The width is a percentage of the average, so it does not change with volatility unless the average itself moves. A wider market move does not widen the envelope by itself.
Donchian, Keltner and envelopes side by side
The table compares the three bands on the points that most often confuse readers. It uses the most common published construction for each, and it states where a source differs in the variant table below.
| Feature | Donchian channel | Keltner channel | Moving average envelope |
|---|---|---|---|
| Centre line | Average of the highest high and lowest low (StockCharts) | Usually a 20-period EMA | A simple or exponential moving average |
| Width basis | The highest high and lowest low over the lookback | A multiple of the ATR | A fixed percentage of the moving average |
| What the width reacts to | The range of the recent extremes | Average true range, so volatility | The average price only; it does not measure volatility |
| Typical reading | Price at the top or bottom of its recent range | Price relative to a volatility-scaled band | Price relative to a fixed percentage from the average |
| Main limit | Lags, since it uses only past bars; a single extreme can move a band sharply | Depends on the ATR length and multiplier chosen | Percentage needs re-setting across assets with very different volatility |
Sources: StockCharts ChartSchool Price Channels, Keltner Channels and Moving Average Envelopes pages, and the TradingView support page for Keltner Channels (KC). The comparison is a summary of those published constructions, not a claim about any platform's settings.
Where sources give different defaults
Defaults are where the sources disagree, so check the platform you use. The table lists what each cited reference states. Where a source gives no default, the cell says so instead of filling it in.
| Indicator and source | Centre line | Width | Stated default |
|---|---|---|---|
| Donchian (StockCharts Price Channels) | (High + low) / 2 over the period | Highest high and lowest low | 20 periods |
| Keltner, modern (StockCharts) | 20-period EMA | 2 x ATR(10) | EMA 20, ATR 10, multiplier 2.0 |
| Keltner (TradingView support) | Basis from the Length input, EMA optional | Multiplier x ATR | Length 20; multiplier and ATR length not stated on the cited page |
| Keltner, original (StockCharts description) | 10-day SMA of typical price | 10-day SMA of the high-low range, added and subtracted | 10 days |
| Envelopes (StockCharts) | Simple or exponential moving average | Fixed percentage of the average | SharpCharts parameters 20 and 2.5% |
| Envelopes (MetaTrader 5 help) | Simple moving average of close, period N | Shift of K / 1000 from the average, labelled basis points | Default not stated on the cited page |
The StockCharts Keltner page and the TradingView support page agree on a 20-period centre line and a multiplier of 2 in the examples. TradingView's support page does not state an ATR length, so treat ATR length as a setting to check, not a fixed rule.
Two further points need care. The MetaTrader 5 help page defines the envelope shift as K / 1000 and labels it basis points. K / 1000 is a fraction (K = 25 gives 2.5%), so the label does not match the scale. One StockCharts paragraph also describes envelope bands as 2.5 standard deviations from the average, a different construction from the percentage bands. Confirm the units and the formula in your own platform's settings before you compare two charts.
Worked example: the same price series
This is an Example with round numbers, not a real instrument or a forecast. Assume a series where the 20-bar high is 102.00, the 20-bar low is 96.00, the 20-period EMA is 100.00, the 10-period ATR is 1.50, and the 20-period simple moving average is also 100.00.
Donchian channel: upper line 102.00, lower line 96.00, centre line (102.00 + 96.00) / 2 = 99.00. The width is 6.00, which is 6% of the 100.00 price level. Example only.
Keltner channel (EMA 20, ATR 10, multiplier 2): upper line 100.00 + (2 x 1.50) = 103.00; lower line 100.00 - (2 x 1.50) = 97.00. The band is 3.00 either side of the centre line. Example only.
Moving average envelope (SMA 20, 2.5%): upper line 100.00 + (100.00 x 0.025) = 102.50; lower line 100.00 - 2.50 = 97.50. The band is 2.50 either side of the average. Example only.
Now suppose the 10-period ATR rises from 1.50 to 2.00 while the EMA stays at 100.00. The Keltner upper line moves to 104.00 and the lower to 96.00, a band of 4.00 either side. The envelope stays at 102.50 and 97.50, because it is a fixed percentage of the average. The Donchian channel changes only if the 20-bar extremes change.
What the bands can and cannot show
- A Donchian channel can show where price sits within its recent range. It cannot show whether a break of the range will continue, because the channel is built from the same past bars that it describes.
- A Keltner channel can show whether price is far from its average in ATR terms. It depends on the ATR length and multiplier, so two charts with different settings can show different touches.
- An envelope can show a fixed percentage distance from its average. It does not separate a quiet market from a volatile one, so it may read as wide or narrow for reasons unrelated to risk.
None of the three bands measures probability. A touch of a band is a fact about the chart at that bar. For another channel type, see the linear regression channel.
Risk disclosure
- All three bands are calculated from past prices. A band touch, a band break or a change in width describes the chart and does not forecast what price will do.
- Donchian channels lag, because they use only past bars. A new extreme enters the channel from the following bar, and it may fall back inside the range soon after.
- Keltner channels depend on the ATR length, the multiplier and the choice of EMA or SMA. Different settings can change the picture materially, so test your settings before you rely on them.
- Envelope percentages are not comparable across markets with different volatility. A fixed percentage can be wide in a quiet market and narrow in a volatile one.
- Any trade based on a band needs an exit plan, position size and a stop loss, which these indicators do not set. See what is a stop loss order for how stops work.
- This page is educational and is not personal financial advice. Trading can lose money, and the worked numbers are Examples only.
RTX5 status
This guide explains Donchian channels, Keltner channels and moving average envelopes in general and does not describe an RTX5 feature. No RTX5 release record confirms which indicators, chart types or alerts the product includes. Its Windows desktop client is in preview, and the web and mobile clients are planned. A Google Play listing for Android is published, but the mobile client has no approved release record yet; check the product-availability record before relying on any RTX5 feature.
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Primary references
Sources were checked on 10 November 2026. They explain market rules and concepts; they do not certify RTX5 or provide individual financial advice.
StockCharts ChartSchool: Price ChannelsGives the 20-period high and low construction and the centre line (20-day high plus 20-day low, divided by 2). States the indicator was developed by Richard Donchian and is sometimes called Donchian Channels. Checked 10 November 2026.StockCharts ChartSchool: Keltner ChannelsDefines Keltner channels as volatility-based envelopes around an EMA, with 2 x ATR(10) bands around a 20-day EMA in its example, which it says uses the SharpCharts default parameters (20, 2.0, 10). Describes Chester Keltner's original 10-day SMA of typical price and 10-day SMA of the high-low range. Checked 10 November 2026.StockCharts ChartSchool: Moving Average EnvelopesDefines moving average envelopes as percentage-based bands around a simple or exponential moving average, with a 20-day SMA and 2.5% example and the upper and lower band formulas. Notes a SharpCharts default parameter of 20 and 2.5. Checked 10 November 2026.TradingView support: Keltner Channels (KC)Credits Chester Keltner's 1960 book with the basic idea, and Linda Bradford Raschke with the EMA centre line and ATR bands. Gives the length input a default of 20 and shows an EMA basis with 2 x ATR bands in its example. Does not state the ATR length or multiplier defaults on the cited page. Checked 10 November 2026.MetaTrader 5 help: EnvelopesDescribes the envelope formula as a simple moving average of close with upper and lower lines at SMA x (1 +/- K / 1000), where K / 1000 is the shift from the average, labelled basis points. Does not state default values for N or K on the cited page. Checked 10 November 2026.RTX5 product availabilityRTX5 status record. Use it to check which RTX5 products and clients are live before relying on any feature.
Questions readers ask
What is the difference between a Donchian channel and a Keltner channel?
A Donchian channel uses the highest high and lowest low over a lookback period, so its width comes from the recent range of extremes. A Keltner channel sits a multiple of the average true range above and below a moving average, so its width reacts to volatility. The Donchian centre line is the midpoint of the two extremes, while the Keltner centre line is usually an exponential moving average.
What are the default settings for a Keltner channel?
StockCharts gives a 20-period exponential moving average centre line, an ATR period of 10 and a multiplier of 2.0. The TradingView support page gives a length of 20 but does not state the ATR length or multiplier defaults. Check the settings dialog of the platform you use, because the defaults differ between sources and products.
Is a moving average envelope the same as a Keltner channel?
No. An envelope sits a fixed percentage above and below a moving average, so its width depends only on the average price. A Keltner channel sits a multiple of the average true range from its centre line, so its width changes with volatility. Both are centred on a moving average, which is why they can look similar on a chart.
Does a price touch of a Donchian or Keltner band mean a reversal is due?
No. These bands are calculated from past prices, and a touch shows only where price sits relative to the band on that bar. A touch can be followed by a continuation, a reversal or a range. The indicator does not measure the probability of either outcome, so it should be combined with a plan for position size, exit and risk.
Keep learning
Average true range (ATR)How ATR measures volatility, and why it sets the width of a Keltner channel.Exponential moving averageHow an EMA weights recent prices, and the centre line used by most Keltner channels.Linear regression channelA channel built from a fitted line rather than extremes, averages or ATR.Support and resistanceWhy recent highs and lows are often read as levels, and the limits of that reading.