Comparing the MDC with the Moving Average Envelope
It was emphasized earlier that there are significant differences between the MDC and the moving average envelope as well as some similarities. First, like the MA envelope there's an average price calculation in MIDAS.1 Second, there's also the technique of deploying user-defined percentages to displace a central line above and below itself. However, Figure 14.8 reveals some major differences. The latter is a 1m chart of the Xetra DAX December 2009 contract with a 20-period exponential moving average and envelopes plotted at a conventional setting of 0.20 percent. The chart is broken up into three phases: (1) marks the uptrend, (2) marks the gradual downtrend, and (3) marks the accelerated downtrend. ...
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