Envelopes
Envelopes Technical Indicator
Section titled “Envelopes Technical Indicator”The Envelopes Technical Indicator consists of two Moving Averages, one shifted upward and one shifted downward. The selection of the shifting of the band margins depends on market volatility. Higher volatility results in a stronger shift.
Definition of Envelopes
Section titled “Definition of Envelopes”Envelopes define the upper and lower margins of the price range. A signal to sell is generated when the price reaches the upper margin, while a signal to buy is generated when the price reaches the lower margin.
Logic behind Envelopes
Section titled “Logic behind Envelopes”Envelopes are based on the idea that when buyers and sellers become too extreme, the price tends to stabilize and move towards more realistic levels. This concept is similar to Bollinger Bands® (BB).