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The Moving Average Envelope indicator creates upper and lower channel lines plotted an equidistant % (or number of pips) above and below the moving average.
Interpretation
While several different trading rules are available, the simplest approach uses price penetrating the upper channel to initiate long positions and price penetrating the lower channel initiate short positions.
An alternative to the above methods when the market is more range bound is to use price touching the upper channel to go short price touching the lower channel to go long.
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