Momentum CFD Analysis and Momentum Trading Signals

The MA 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

CFDs Analysis and How to Generate CFDs Signals

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

Bullish Trading Signal

Price penetrating the upper channel is a long buy trading signal.

Buy Signal

Bearish Trading Signal

Price penetrating the lower channel is a short sell trading signal.

Sell Signal

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