Moving Average Envelope

Overview:

The Moving Average Envelope indicator creates upper and lower channel lines plotted an equidistant % above and below the moving average.

Uses:

While several different trading rules are available, the most simple approach uses price penetrating the upper channel to initiate long position and price penetrating the lower channel initiate short positions.

An alternative to the above methods when the market is more rangebound is to use price touching the upper channel to go short price touching the lower channel to go long.

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