ENV Overview

The Envelope (ENV) indicator places bands at a fixed percentage above and below a moving average. Unlike Bollinger Bands (dynamic width from standard deviation) or Keltner Channels (ATR-based), Envelope uses a constant percentage offset — making band width predictable and consistent.

Envelope is the simplest band indicator: if the MA is 100 and the percentage is 5%, the upper band is 105 and lower is 95. This simplicity makes it easy to understand and optimize.

How Envelope Works

Core Concept

Calculate center line: Moving average of price over n periods
Calculate bands: Apply offset (ATR, StdDev, or percentage) above and below center
Compare price to bands: Price above upper = breakout/overbought, below lower = breakdown/oversold

Key Characteristics:

Volatility Envelope = Bands define price boundaries
Overlay Display = Plotted directly on the price chart
Dynamic Width = Width adapts to market conditions

Visual Interpretation

ENV Behavior:

Price breaking above upper band suggests bullish breakout
Price breaking below lower band suggests bearish breakdown
Price between bands = within normal range

Trading Signals Available on Reversion

These are the signal names you select when configuring ENV in the algorithm builder or via the MCP agent:

Signal	Triggers When	Typical Use
`price_above_upperBand`	Price crosses above the upper envelope	Overbought / breakout above percentage band
`price_below_lowerBand`	Price crosses below the lower envelope	Oversold / breakdown below percentage band

Display: Overlay (on price chart)

Category: Volatility

Threshold range: Price-based

Key Characteristics

What Envelope Does Well:

Volatility Measurement: Envelope excels at identifying price extremes
Visual Clarity: Bands clearly show price boundaries on the chart
Works Across All Markets: Universal application