Momentum Analysis and Momentum Signals
The Moving Average Envelopes indicator creates two lines around the 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.
MA Envelope
Technical Analysis and Generating Signals
MA Envelope can be traded using several different rules. Main method of generating xauusd signals is to use the price penetrating the upper channel or lower channel.
Bullish Signal
Price penetrating the upper channel is a long buy gold trade signal.
Buy Signal
Bearish Signal
Price penetrating the lower channel is a short sell trade signal.
Sell Signal
In a trending market the Moving Average points upward in an up trend market or downward in a down trending market. It is good to use the envelopes together with other indicators such as trendlines so as to confirm the signals generated.