Envelopes
define the upper and the lower margins of the price range. Signal to sell
appears when the price reaches the upper margin of the band; signal to buy
appears when the price reaches the lower margin.
The
logic behind envelopes is that overzealous buyers and sellers push the price to
the extremes (i.e., the upper and lower bands), at which point the prices often
stabilize by moving to more realistic levels. This is similar to the
interpretation of Bollinger Bands.









Add a Comment
<<Home