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Apply Envelope Indicator

SMA/WMA/EMA Envelopes plot a band composed of two moving averages, one which is shifting upwards, the other shifting downwards, to help define a stock's upper and lower boundaries. The bands of an envelope are calculated as follows:

Upper Band = MA(CLOSE, N)*[1+K/100]

Lower Band = MA(CLOSE, N)*[1-K/100]

Where:

MA — Simple (or Weighted or Exponential) Moving Average;

N — averaging period;

K/100 — the value of shifting from the average (measured in basis points).

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To apply an Envelope indicator

  1. From within a chart, from the Edit menu select Studies.
  2. Choose Envelope and Add the study.
  3. Complete parameters as necessary.

 

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