Momentum Commodity Trading Technical Analysis & Momentum Trading Signals

The Moving Average Envelope indicator creates two lines around the commodity 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

Commodity Trading Technical Analysis & How to Generate Signals

MA Envelope can be traded using several different rules. The main method of generating commodity trading signals is to use the commodity price penetrating the upper channel or lower channel.

Bullish Trading Signal

Commodity Trading Price penetrating the upper channel is a long buy commodity trade signal.

Buy Trading Signal

Bearish Trading Signal

Commodity Trading Price penetrating the lower channel is a short sell commodity trade signal.

Sell Trading Signal

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