Momentum Oil Technical Analysis and Momentum Trading Signals

The Moving Average Envelopes indicator creates two lines around the crude oil price forming a channel. The upper and lower channel lines are drawn at an equidistant level above and below the Moving Average. The distance to draw the envelopes is calculated using a percent or a number of pips.

Moving Average Envelope

Crude Oil Trading Technical Analysis & Generating Trading Signals

MA Envelope can be traded using several different trading rules. Main technique of generating oil trading signals is to use the crude oil price penetrating the upper channel or lower channel.

Bullish Trading Signal

Oil Trading Price penetrating the upper channel is a long buy oil trade signal.

Buy Trading Signal

Bearish Trading Signal

Oil Trading Price penetrating the lower channel is a short sell oil trade signal.

Sell Trading Signal

In a trending market the Moving Average points upward in an up oil trend market or downward in a down crude oil trending market. It is good to use the envelopes together with other indicators such as oil trendlines so as to confirm the trading signals generated.