The Envelope indicator indicates the overbought/oversold situation of the price, allowing to determine the opportunity to open/close a position, the possibility of a trend stop.
Use of Envelope Indicator
This indicator has two average lines under it, forming a channel for price fluctuations. The average is a fixed distance from the moving average, and the average is adjusted by current market fluctuations. Each average line is a limit for price fluctuations.
If there is an upward trend in the market, it is a sign of overbought, and if there is a downward trend, it is a sign of oversold
The price of the market channel reaches the highest value – a signal to buy, the price reaches the lowest value – a signal to sell.
Envelopes Indicator