# Moving Average Envelopes

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The Moving Average Envelope functions compute a pair of data bands that envelope a moving average of the input data values.

Each data band is positioned a percentage-based magnitude away from the moving average line. The average line can be calculated using a simple moving average or an exponential moving average. Applications of the Moving Average Envelope functions include indication of overbought/oversold conditions and price trends for a security.

The mathematical expressions being calculated are as follows:

```Upper = Moving Average * (1 + K)
Lower = Moving Average * (1 – K)```

Where K is the indicated percentage-based factor.

Using MOVAVGEVPUPPER:

Using MOVAVGEVPLOWER:

Note
A similar envelope can be generated by the Bollinger Bands functions, which uses standard deviations instead of a percentage-based factor.

## 1. Syntax

Upper Envelope:

```MOVAVGEVPUPPER(d0,s0,s1,s2,Alignment)
```

Lower Envelope:

```MOVAVGEVPLOWER(d0,s0,s1,s2,Alignment)
```

## 2. Input

The MOVAVGEVPUPPER and MOVAVGEVPLOWER functions require the following input:

• d0 - Input data values - The set of data values for which the MOVAVGEVPUPPER and MOVAVGEVPLOWER formulas are calculated.

## 3. Parameters

The MOVAVGEVPUPPER and MOVAVGEVPLOWER functions require the following parameters.

• s0 - Moving Average Type - The type of moving average to use in the calculation. Valid values are:
• 0 : Simple Moving Average (default)
• 1 : Exponential Moving Average
• s1 - Period - The number of time periods to use in the calculation. Default value is 10.
• s2 - Envelope factor - The factor used to shift the bands away from the simple moving average. Default value is 2.5.
• Alignment (Optional) – Hierarchy placeholder to be used as the alignment axis.

## 4. Output

The MOVAVGEVPUPPER function generates the following output:

• Upper Envelope - The Upper Envelope result set.

The MOVAVGEVPLOWER function generates the following output:

• Lower Envelope - The Lower Envelope result set.