Envelopes
is one of the MT4 default indicators. The indicator can actually be
used together with the moving average. If used together, the
indicator display will be as follows:
The
three lines form a wave with a MA line in the middle. The blue and
red lines move away from the MA because it is measured based on the
deviation. The deviation can be adjusted to adjust the trading style.
Scalpers are advised to use MA in the 21st period and deviations of
less than 0.5%. While Swing Trader may use an MA more than 50% and
more than 0.5% deviation.
MA
Envelopes highlights some areas where prices will rebound during the
trend. Here are some guidelines for using MA Envelope: Paying
attention to the possibility of a bearish reversal during the uptrend
there is a pullback (retracement) During the downward trend, the
price moves from the central line to the red line. If you are in a
downward trend there is a rally until it goes back over the red line,
beware of the possibility of a bullish reversal. The advantage of the
MA envelope compared to the conventional moving average is its ease
in "isolating" trend movements. You can make a profit by
highlighting price movements that will be reversed when prices bounce
on red or blue lines.
Simple
template with Envelopes:
Simple
moving average 14 period close.
Envelopes
14 period, 0.25.
In
the picures Envelopes with MA
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