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 Moving Average Envelopes (MAE).

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Posts : 22
Join date : 2011-04-13

PostSubject: Moving Average Envelopes (MAE).   Fri Aug 05, 2011 12:29 pm

Moving Average Envelopes (MAE) are a natural trend following forex indicator. They are percentage-based envelopes set the same percentage above and below a moving average - plus and minus a certain user defined percentage deviation. This creates parallel bands that follow price action.

Indicators based on channels, bands and envelopes are designed to encompass most currency price action. Therefore, moves above or below the envelopes warrant attention. MAE work by not showing the buy or sell signal until the trend is established. The goal of envelopes is to identify trend changes. Most of the time, when prices touch the envelope lines, prices reverse. But there are some times when they continue trending, leading to losses.

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