エンベロープ（Envelopes）とは

Envelopes

 

Envelopes

1. Overview

Envelopes are a technical indicator plotted on a price chart by setting a fixed distance above and below a moving average line, creating bands that encompass price movements. This indicator is used to observe how price behaves within the bands and to identify overbought or oversold conditions.

Envelopes show the range in which price typically stays and suggest a potential reversal when price moves beyond that range. Unlike Bollinger Bands, which adjust according to price volatility, Envelopes are drawn at a fixed distance from the moving average.

2. Structure and Calculation

An Envelope consists of three lines:

  1. Center Line: The moving average for a specified period (usually Simple Moving Average, SMA).
  2. Upper Band: The center line plus a set percentage (e.g., 2%).
  3. Lower Band: The center line minus the set percentage.

The formulas are as follows:

  • Upper Band = SMA + (SMA × set percentage)
  • Lower Band = SMA - (SMA × set percentage)

This allows traders to visually capture the range where price usually moves.

3. How to Use Envelopes

  1. Identifying Reversal Points
    • If price exceeds the upper band, it may signal overbought conditions and a potential selling opportunity.
    • If price falls below the lower band, it may signal oversold conditions and a potential buying opportunity.
  2. Confirming Trends
    • If price continues moving in one direction within the bands, it suggests the trend is ongoing. Price hugging the upper or lower band often indicates a strong trend.
  3. Distinguishing Trends vs. Ranges
    • Frequent back-and-forth within the bands suggests a range-bound market.
    • Price breaking significantly outside the bands may indicate a trending market.

4. Advantages and Disadvantages

Advantages:

  • Visually intuitive: Easy to see whether price is inside or outside the bands, helping identify reversals and trend direction.
  • Flexible: Parameters (percentage and period) can be adjusted to fit different market conditions.
  • Effective in ranges: Particularly useful in sideways markets to identify trading opportunities.

Disadvantages:

  • Limited in strong trends: Price may stay outside the bands during strong trends, making overbought/oversold signals less reliable.
  • Parameter-dependent: Poorly chosen percentages can generate false signals.

5. Practical Examples

  • Buy Example:

    If price dips below the lower band and then returns inside after a few candles, it may suggest a reversal and a potential buy entry.

  • Sell Example:

    If price rises above the upper band and then falls back inside, it may suggest a reversal from overbought conditions and a potential sell entry.

  • Trend-Follow Example:

    If price remains near the upper or lower band, it suggests the trend may continue, making trend-following strategies suitable.

6. Summary

Envelopes are a convenient tool to visualize the range of price movement and highlight potential reversals when price crosses beyond the bands. They are particularly effective in range markets. However, since price can stay outside the bands during strong trends, combining them with other indicators such as RSI or MACD is recommended.

Using Envelopes helps confirm reversals and ongoing trends visually, enabling more effective trading decisions. Accuracy improves further when combined with complementary indicators.

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Frequently Asked Questions (Q&A)

Q1. What is a typical band percentage setting?

A1. Generally, 1–3% is common, but the optimal setting depends on volatility and timeframe. Choose values that historically show reasonable touches and re-entries into the bands.

Q2. How is it different from Bollinger Bands?

A2. Bollinger Bands adjust width based on standard deviation of price, while Envelopes use a fixed percentage above/below the moving average. Envelopes do not self-adjust to volatility.

Q3. How should Envelopes be used in strong trends?

A3. Price may remain outside the bands during strong trends. Instead of counter-trend entries, use slope of the moving average, volume, and trend indicators to prioritize trend-following.

Q4. Should I use SMA or EMA?

A4. SMA is standard, but EMA can be used for quicker response. SMA is smoother, EMA is more sensitive—choose based on timeframe and strategy.

Q5. Are Envelopes helpful in range markets?

A5. Yes. Frequent oscillations within the bands suggest a range. Combine with support/resistance and volume analysis for higher accuracy.

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