Moving Average Envelopes

Moving Average Envelopes are tools in technical analysis used to identify market trends. They consist of two lines plotted at a certain percentage above and below a moving average. The central moving average line helps to smooth out price action, while the envelope lines signal potential buy or sell opportunities when prices reach these boundaries. Traders use them to identify overbought or oversold market conditions. This helps in making informed trading decisions by highlighting potential reversal points or confirming existing trends.