Keltner Channel Width

Keltner channel width measures the ATR envelope around the middle average. Unlike Bollinger Band Width, it does not square the deviations, and it does include gaps, because ATR's true range includes the prior close. It changes smoothly. A squeeze in Keltner width means recent true ranges, including gaps, have been small. The common comparison with Bollinger Bands, bands inside Keltner as a squeeze, uses this difference on purpose: standard deviation has collapsed even relative to ATR.

When Bollinger Bands fit inside the Keltner Channels, the standard-deviation envelope is tighter than the ATR envelope. That is the TTM-style squeeze condition. Keltner width alone, falling, says ranges and gaps are calming. It still does not choose a direction. The release is a close back outside, or a momentum turn, depending on the system.

Use the width to see ATR compression without looking at direction. Use it next to BandWidth when you want to know whether the squeeze is "quiet closes" or "quiet ranges including gaps." Prefer the ATR version around earnings markets, where the gap is the risk.

Assuming a narrow Keltner width and a narrow Bollinger width are the same event. A market can have tight closes and one gap, which widens Keltner and not the close-based bands, or the reverse. Also treating the squeeze release as a guaranteed trend. Ranges fake the release too.

ATR smoothing lags. The width stays elevated after a shock and stays compressed into the first breakout bar. It is a regime tool. The breakout bar is still a price event you have to judge on its own.