Momentum Analysis and Momentum Signals

The Moving Average Envelopes creates 2 lines around the price forming a channel. The upper and lower channel lines are drawn and plotted at an equi-distant level above & below the MA. The distance to draw the MA Moving Average envelopes is calculated using a percent or a number of pips.

MA Envelope

Technical Analysis and Generating Signals

MA Envelope can be traded and transacted using several different rules. Main method of generating xauusd signals is to use the price penetrating/testing 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 signal.

Sell Signal

In a trending market the Moving Average points upwards in an uptrend market or downward in a down trending market. It is good to use the envelopes together with other indicators like trend-lines so that to confirm the signals generated.

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