iMACD and Envelopes Indicator

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In this video tutorial, we combine the iMACD and Envelopes Indicator for yet another simple to execute trading strategy.

Let’s do a quick recap on the Envelopes Indicator.

If you recall from our Envelopes Indicator tutorial, on its own, the Envelope Indicator can be used effectively as a reversal strategy.

For long opportunity, what we want to see is the price moving out of the Envelopes band… and then moving back into the lower Envelopes Band for it to trigger a buy signal.

For short opportunity, what we want to see is the price moving out of the Envelopes band… and then moving back into the upper Envelopes Band for this indicator to trigger a sell signal.

However, buy or sell signals from just 1 indicator has proven to be too unreliable… from experience.

So it’s wise to combine it with another indicator and in this video tutorial, we used the iMACD indicator.

You can of course use any other indicators that you want just as long as you know how the indicator works.

When we get a buy or sell signal from the Envelopes Indicator, it’s time for us to look for the crossovers for the red and blue line in the iMACD.

When there is a sell signal from the Envelopes, then we want to see the red line crossing the blue line for a confirmed short entry.

When there is a buy signal from the Envelopes, then we want to see the blue line crossing the red line for a confirmed long entry.

If you want to add a 3rd indicator to any strategy, that is also fine but just know that there will be far less trading opportunity as it’s difficult to have all indicator lined up at the same time.

Even with 2 indicators, they may not line up at the same time… hence the need to provide some leniency… perhaps only up to 3 trading sessions.

Well, we hope you have enjoyed this strategy as much as we have preparing it for you.

See you in the next tutorial.

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