Envelopes Channel Trading

Trading main envelopes traders aur investors ko extreme overbought aur oversold conditions k sath sath trading ranges ko identify karnay ma help provide kartay hain, is ma jb prices upper band ko cross karti hain ya us k kareeb hoti hain to sell signals generate hotay hain aur jb prices lower band ko cross karti hain ya us k kareeb hoti hain to buy signals generate hotay hain, agr dakha jay to ye technical indicators jo price chart bars k around upper aur lower bands par plotted hotay hain in channels kehtay hain, ye simple moving average sa generate hotay hain aur moving average k above aur below aik pre-determined distance sa show hotay hain.



Envelopes Channel Trading Strategy.

Strategy Kay hisab sy is me upper aur lower band k darmian distance calculate karnay k liay higher aur lower moving average k percentage variables ko use kia jata ha jin ki value two say lay kar five percent aur phir 10 percent hoti hain friends envelope channels ki number of deviations bollinger bands ya keltner channels k kafi similar hoti hain, in channels ko different techniques k sath create kia jata hai.

Price Conditions.



Envelope Channel trading main market ki normal conditions main prices upper aur lower bands kay darmian ma rehti hain, jb k market ki volatility ki conditions in envelope k bnads kay darmian gap narrow ya wide ho kay information daitay hain aur envelopes traders aur investors ko extreme overbought aur oversold conditions k sath sath trading ranges ko identify karnay ma help provide kartay hain, is ma jb prices upper band ko cross karti hain ya us k kareeb hoti hain traders ko breakouts aur breakdown ma envelope channels sa help laini chaiay kyn kay in kay use sa trades ki reliabilty aur profability k best chances hotay hain.

Re: Envelopes Channel Trading

What Is an Envelope Channel?

Envelope channel refers to upper and lower bands around price bars, generated by a moving average and a pre-determined distance above and below the moving average. The distance can be calculated through a percentage variable higher and lower than the moving average (i.e., 2%, 5%, or 10%,), or the number of standard deviations (i.e., 1, 2, 3, similar to Bollinger Bands).

Understanding Envelope Channels

Envelope channels can be created using a variety of techniques, so long as they work together to form upper and lower bands that surround the security’s price.
For example, a trader may use a 20-day simple moving average and 5% distance to generate an envelope channel for a given security. Other examples might include Bollinger Bands or Keltner Channels, which are volatility-based envelopes created using exponential moving averages.
Many traders react to a sell signal when the price reaches the upper band and a buy signal when the price reaches the lower band of an envelope channel. Often times, traders need to experiment with different moving average and distance settings to find what works for a given security or market. They should also watch for breakouts and breakdowns from envelope channels in more extreme circumstances because those signals may generate greater reliability and profitability.
Other technical indicators or chart patterns can be helpful in confirming reversals, lowering the frequency of false buying or selling signals.

Envelope Channel Example

Charting services define and calculate the envelope channel in different ways. For example, Worden's TC2000 envelope channel utilizes a moving average and percentage distance above and below the moving average.

The indicator is set to a 20-day simple moving average and 6% distance in this Apple example, drawing upper and lower bands that contain the vast majority of price movement between October 2017 and August 2018.






A rally surges outside the top band in November 2017, setting off a sell signal that precedes a minor decline, followed by a three-month trading range. A decline into February cuts through the bottom band for a week, triggering whipsaw losses if dip buyers enter too early. The bounce into March reverses at the top band but the stock posts a slightly higher high before turning sharply lower mid-month....