Usage of the Envelopes Indicator
The Envelopes indicator consists of two Moving Averages, one dislodged up, and the other one dislodged down. This indicator defines the range of the normal price behavior. The usage of the Envelopes is based on the fact that when the price leaves the normal range, it is very likely to return back to it.
In a strategy, the simplest way to use the Stochastic indicator, is to open a buy position if the price rises above the Bottom Line, and open a sell position if the price falls below the Top Line.