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Breakout
How does a Keltner channel breakout differ from a Bollinger breakout?
Keltner channel breakout
What it bets
A close beyond a moving average plus or minus a stretch of ATR means the volatility band has opened.
How the rule is written
The version in common use now places a multiple of ATR above and below an exponential average. A close outside the upper band is long. A close outside the lower band is short. Chester Keltner's earlier channel used the high-low range, not ATR. The written rule has to say which formula it uses. The two formulas are not the same historical system.
When it fails
When ATR jumps, the bands widen with it, and the breakout price moves away. When ATR is very small, the bands hug price, and breakouts happen almost every day.
Do not confuse it with
Bollinger width comes from standard deviation, so one outlier close can blow it wider. Keltner width comes from ATR, so a single long wick moves it less. SuperTrend usually keeps only the side that remains after a flip.