Sign In with Google
Sign In with Facebook
The Envelopes Histo is a modification version of the Envelopes trend indicator, which is included in the standard forex set. Unlike the main indicator, Envelopes Histo is presented in the lower window of the price chart as a histogram, which changes color under certain conditions, and not in the form of already familiar moving averages. This indicator is used to determine the presence and strength of the current market trend and the possibility of opening positions at this moment. To reproduce the calculations, the indicator uses a channel of two non-intersecting moving averages, which are part of the standard Envelopes. And depending on the location of the price relative to this channel, the histogram acquires a certain color.
The Envelopes Histo indicator does not lose its effectiveness when used on any timeframe, with any currency pair.
Input parameters
The Envelopes Histo indicator in its settings has 6 input parameters that, to one degree or another, affect its calculations. The indicator parameters do not require special skills to install, but the general operation of the indicator is also associated with their change. The indicator Color section affects to its visualization and thickness of its values, and the Levels section to adding signal levels.
- Envelope Period - the period of the moving lines of the indicator. The default value is 60.
- Envelope MA shift - parameter responsible for the shift of moving averages. The default value is 0.
- Envelope MA mode - parameter of the type of smoothing of the moving averages of the indicator. The default value is 3.
- Upper price - upper price value of the indicator. The default value is 0.
- Lower price - value of the lower price level of the indicator. The default value is 0.
- Deviation - deviation of the indicator values. The default value is 0.2.
Indicator signals
The Envelopes Histo indicator, as is the case with many histogram indicators, generates a signal in case of a change in its color, thus, taking into account the color of its histogram, a certain position can be opened. But before the histogram changes color, the price must cross the lower or upper boundary of the moving Envelopes Histo .If the price is above the upper moving average, then the histogram is colored with a growth value, and if, on the contrary, the price falls below the lower moving average, then the histogram acquires a color with a falling value. If the histogram acquires a neutral shade, the price is inside the channel, and in this it is better not to trade at the moment, in order to avoid a minimum profit.
Signal for Buy trades:
- For several bars, the histogram is colored with the growth value.
That is, after the appearance of such a color in the histogram, a long position can be opened. It should be closed after the histogram changes its color. This indicates the end or weakening of the current uptrend and the possibility of its change. In this case, it should be prepared to open new positions.
Signal for Sell trades:
- For at least three bars, the histogram is colored with a fall value.
After receiving such a signal, a sell trade can be opened, which should be closed after the appearance of a different color in the histogram. In this case, the downward trend weakens or ends, which makes it possible to open new positions.
Conclusion
The Envelopes Histo indicator is very effective, but at the same time extremely easy to use, like its standard version, however, unlike it, the new indicator is more convenient in visual perception. The indicator can be used both separately and with additional signals confirming it indicators, which creates a greater likelihood of obtaining maximum profit. For a more accessible and simple use of the indicator, preliminary practice on a demo account is recommended.
