Mnikolic Investment Technologies
intelligent investment technologies™
Mnikolic Investment Technologies
intelligent investment technologies™

TradeBuilder - Classic Edition v10 has officially been released and is now available for download (existing users) and purchase. The tenth generation strategy building framework features a brand-new integrated indicator, Envelopes, bringing the total number of them to 31. Compounding and combining effects of 31 indicators provides traders with tools to build thousands of unique, sophisticated strategies for any market, risk appetite, and style of trading. Envelopes can be used as, both, a filter in trend following strategies, and statistical triggers in scalping - more on this later.

Featured market: Pound/Dollar (GBP/USD) 1-hour chart, short-term trend following setup: Envelopes, Ichimoku Kinkō Hyō, Average True Range, Average Directional Index, Volume.

New integrated indicator: Envelopes

Envelopes are built using 2 deviated moving averages (upper and lower), with deviation being measured in percentage terms. This means lower time frames (under 1 hour), with their lower daily vertical range require lower Deviation values (under 1%) while higher time frames (over 1 hour) require higher Deviation values (over 1%, realistically in the 3-5% range). Of course, Deviation input is up to the user - their strategy and risk appetite.

Indicators based on price boundaries, such as Envelopes and Bollinger Bands (also available in TradeBuilder) encompass price action most of the time. When price action occurs outside of these boundaries it represents a statistical extreme - one which can be applied as buy/sell trigger in trend following and scalping strategies.

Application in Trend Following Setups

Envelopes can be used within a strategy in many different ways. One of the most common is using upper envelope pierce by price as bullish signal and lower envelope pierce as bearish signal. The space between upper and lower acts as a buffer or filter against choppy or consolidating markets. Piercing of these bounded statistical extremes represents strength in the market - either trend, momentum, or both. By default, TradeBuilder will issue a buy signal when price crosses over upper envelope and sell signal when price crosses under lower envelope. The reverse happens when Envelopes are active in Overbought/Oversold (OB/OS) mode – buy when lower envelope crossed, sell when upper envelope is crossed.

The Euro/Dollar (EUR/USD) 1-hour chart below shows TradeBuilder Classic with just the Envelopes indicator active. As trend gains strength it pierces upper/lower envelopes, often marking an onset of bullish/bearish trend. Metatrader's Envelopes indicator was added to the chart for demonstration and is not required for operation of TradeBuilder.

Application in Scalping

Envelopes in OB/OS mode are best applied in two scenarios: scalping and exit signals. Higher Deviation values represent higher probability of price reversing once the deviated moving averages are hit (unless market is strongly trending). As such, traders often use price penetration of upper envelope as a bearish reversal signal and penetration of lower envelope as bullish reversal signal. With take profit, stop loss, and/or trailing stop in place this pinballing between upper and lower envelopes constitutes a popular scalping strategy.

The Dollar/Yen (USD/JPY) 5-minute chart below shows TradeBuilder Classic with its global scalping mode enabled. The only active integrated indicator is Envelopes but because of scalping mode, signal direction is reversed. We inputted a considerably higher Deviation value between upper and lower envelopes to ensure that price has a higher probability of reversal upon crossing them.

Envelopes with high Deviation values can also be used as exit signals for positions entered using a non OB/OS TradeBuilder instance (see Multiple Instance Strategy) or another indicator, such as TrendSuite or MarketScalper. Since highly deviated moving averages represent areas of over or under supply (overbought/oversold zones), price is statistically more likely to reverse. Therefore, closing positions at those points locks in profit and minimizes loss should price decide to reverse.

New Parameters

IndEnvelopes: Setting this parameter to true activates Envelopes
Period_Envelopes: Averaging period for each Envelope MA
Deviation_Envelopes: Deviation between upper and lower envelopes (in percentage)
MAType_Envelopes: Moving average type of upper and lower envelopes (simple, exponential, smoothed, linear weighted)
PriceType_Envelopes: Price type used for the calculation (close, high, low, open, median, typical, weighted)
Shift_Envelopes: How far into future (in terms of bars) the envelopes are projected

Here is one more example of Envelopes in action - this time long term trend following, achieved chiefly via high Deviation value. The higher the Deviation, the more pronounced price filtering is. Target market is Dollar/Loonie (USD/CAD) 4-hour chart. Other active TradeBuilder indicators include double HMA cross, RSI, Heikin Ashi, Force Index, and Volume.

Expanded User Manual

The manual, now 39 pages in length, has been revised to cover Envelopes - see section 4.3.27.

Existing Customers

If you are an existing TradeBuilder Classic customer, only one of the following two options applies:

  1. Customers who purchased TradeBuilder - Classic Edition v5.0 or higher qualify for a free upgrade.
Download latest version
  1. Customers who purchased TradeBuilder - Classic Edition v4.9 or older qualify for a discounted upgrade.
Upgrade now for $195
New Customers

TradeBuilder - Classic Edition v10 is available for sale at the official Marko Nikolic Investment Research store. The current, promotional price is $500. Your purchase includes all future upgrades and versions.

Purchase TradeBuilder Classic

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