Momentum Technical Analysis and Momentum Trading Signals

The Moving Average Envelopes indicator creates two lines around the trading 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

XAGUSD Trading Technical Analysis and How to Generate Trading Signals

MA Envelope can be traded using several different rules. The main technique of generating 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 trade signal.

Buy Trading Signal

Bearish Trading Signal

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

Sell Trade Signal

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