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Technical Chart Indicators and Studies Find descriptions, formulas, parameters, and other help for the indicators and studies used by the Barchart.com Technical Charts application below. Interactive Charts, however, share many of the same studies with Technical Charts. Some of the parameters may be slightly different between the two versions of charts. Unless otherwise specified, the parameters shown in this documentation are those used by the Technical Chart program. * Available in Interactive Charts only Note:When adding multiple moving averages on a chart, the lines will be colored in this order: red, green, blue, purple, orange.
When adding an indicator to a Technical Chart, you can change the parameters of the study by clicking on the indicator name. Moving Average EnvelopeIndicator Type: Overlay - Interactive Charts Only The Price Envelope study (sometimes referred to as "Envelope") is a derivative of the moving average study. It uses only one moving average, which you specify. You also determine the price band. The price band has two lines which are an equal percentage distance from the exponential, smoothed, or normal moving average. The moving average line is not visible. While several different trading rules are available, the most simple approach uses the price band as an entry and exit point. When price penetrates the upper price band, you initiate a long position or buy. If you have an existing short position, you close out shorts and go long. Conversely, when prices penetrate the lower price band, you close out long positions and go short. In Kaufman's book, Commodity Trading Systems and Methods, he suggests several other approaches. They are as follows: Buy or sell on the close after a signal is indicated. In the case of using the moving average envelope on intraday prices, Kaufman suggested the following rule. "Only one order can be executed in one day, either the liquidation of a current position or an entry into a new position." Kaufman's book is an excellent source and reference. While it is definitely written for a mathematically inclined individual, a novice trader would benefit from several of the chapters, especially the chapters on moving averages, oscillators and technical analysis. Default Parameters: 10, 3 Period (10) - the number of bars, or period, used to calculate the moving average. Computation The indicator first computes the moving average. It then computes the percentage band around the moving average. The formula follows: Mat = (P1 +... + Pn) / n It then computes the average of the past n intervals. The software requires you to input a percentage value for the price band in hundredths of a percent. Using that percentage figure, the computations are as follows: UBt = Mat + (Mat * %P)  TOP
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