Momentum Technical Analysis and Momentum Trading Signals
The Moving Average Envelope indicator creates two lines around the forex price forming a channel. The upper and lower channel lines are drawn at an equidistant level above and below the MA. The distance to draw the envelopes is calculated using a percent or a number of pips.
Moving Average Envelope
Forex Technical Analysis and Generating FX Trading Signals
MA Envelope can be traded using several different forex trading rules. The main method of generating Forex trading signals is to use the forex price penetrating the upper channel or lower channel.
Bullish Forex Trading Signal
Forex Price penetrating the upper channel is a long buy signal.
Buy FX Trading Signal
Bearish Forex Trading Signal
Forex Price penetrating the lower channel is a short sell signal.
Sell FX Trading Signal
In a trending market the MA points upwards in an up forex trend market or downwards in a down trending market. It is good to use the envelopes together with other MetaTrader 5 Forex Indicators such as forex trend lines so as to confirm the signals generated.