Moving Average Envelope (MAE)
Moving Average Envelope (MAE)
The Moving Average Envelope creates an envelope around a moving average to find overbought or oversold conditions, to smooth the price trend and as an indicator of price breakouts. The moving average envelope uses a moving average as the center line with a lower and upper bands added a percetnage above and below the center line.
Configuration Options
 Field: Price or combination of prices to use as the base for average calculations. Possible values include:
 Open
 High
 Low
 Close
 Adjusted Close
 HL/2 \( \left ( \frac{High + Low}{2} \right ) \)
 HLC/3 \( \left ( \frac{High + Low + Close}{3} \right ) \)
 HLCC/4 \( \left ( \frac{High + Low + Close + Close}{4} \right ) \)
 OHLC/4 \( \left ( \frac{Open + High + Low + Close}{4} \right ) \)
 Period: Number of bars to use in the calculations.
 Shift Type: Type of offset (percent or points)
 Shift: Percentage or number of points to offset above or below the average.
 Moving Average Type: Type of moving average to use in the calculations:
 Simple: Mean (average) of the data.
 Exponential: Newer data are weighted more heavily geometrically.
 Time Series: Calculates a linear regression trendline using the “least squares fit” method.
 Triangular: Weighted average where the middle data are given the most weight, decreasing linearly to the end points.
 Variable: An exponential moving average with a volatility index factored into the smoothing formula. The Variable Moving average uses the Chande Momentum Oscillator as the volatility index.
 VIDYA: An exponential moving average with a volatility index factored into the smoothing formula. The VIDYA moving average uses the Standard Deviation as the volatility index. (Volatility Index DYnamic Average).
 Weighted: Newer data are weighted more heavily arithmetically.
 Welles Winder:The standard exponential moving average formula converts the time period to a fraction using the formula EMA% = 2/(n + 1) where n is the number of days. For example, the EMA% for 14 days is 2/(14 days +1) = 13.3%. Wilder, however, uses an EMA% of 1/14 (1/n) which equals 7.1%. This equates to a 27day exponential moving average using the standard formula.
 Hull: The Hull Moving Average makes a moving average more responsive while maintaining a curve smoothness. The formula for calculating this average is as follows: HMA[i] = MA( (2*MA(input, period/2) – MA(input, period)), SQRT(period)) where MA is a moving average and SQRT is square root.
 Double Exponential: The Double Exponential moving average attempts to remove the inherent lag associated to Moving Averages by placing more weight on recent values.
 Triple Exponential: TBD
 Simple
 Exponential
 Time Series
 Triangular
 Variable
 VIDYA
 Weighted
 Welles Winder
 Hull
 Double Exponential
 Triple Exponential
 Channel Fill: Whether to shade the area between the top and bottom lines.
 Color Selectors: Colors to use for graph elements.
 Display Axis Label: Whether to display the most recent value on the Y axis.
Formula
Envelopes start with any moving average type (see Moving Averages for formulas) and then creates an offset x% above or below the average or an offset Y points above or below the average.

For percentage envelopes:
Upper band = moving average + x%(moving average)
Lower band = moving average – x%(moving average)

For points envelopes:
Upper band = moving average + constant
Lower band = moving average – constant