I'd like to start by apologizing if this is the incorrect forum to post this topic.
I've been recently trying to use just a few indicators (2 to be precise, EMA and envelopes based on EMA) for swing trading.
However, although i've done some research on google, i cannot find an analytical and serious answer as to what exactly does the deviation represent (also called channel coefficient?).
I understand the rest of the formula, but since im using envelopes, i see how much they are affected by the deviation, yet i do not understand what the deviation applies to, and how to adjust it. Is it the deviation from EMA current price rate?
Say if current rate is 1.300, a deviation of + 5% or -%5 will be used to calculate the upper and lower band?
I would really appriciate if anyone would care to explain, or point me to a good link.
Thank you in advance.
I've been recently trying to use just a few indicators (2 to be precise, EMA and envelopes based on EMA) for swing trading.
However, although i've done some research on google, i cannot find an analytical and serious answer as to what exactly does the deviation represent (also called channel coefficient?).
I understand the rest of the formula, but since im using envelopes, i see how much they are affected by the deviation, yet i do not understand what the deviation applies to, and how to adjust it. Is it the deviation from EMA current price rate?
Say if current rate is 1.300, a deviation of + 5% or -%5 will be used to calculate the upper and lower band?
I would really appriciate if anyone would care to explain, or point me to a good link.
Thank you in advance.