Ask Colin

I have just read your article "Disciplined Trader" in the March 2001 Shares magazine. I am interested in the use of the "envelope" you talked about. We use the Metastock Program and wondered if you could give us some idea of how to install these "envelopes" on a chart, using this program.

I am not a MetaStock user. However, what you are trying to do is draw two lines. One n% above the 22-day Exponential Moving Average (EMA) and another n% below the EMA. In other words, if the value of the EMA at a given date is 100, the upper line of a 20% envelope will be at 120 and the lower line will be at 80. Achelis, who wrote MetaStock, describes the envelope in his book, so I will be surprised if it cannot be done. He calls them "shifted" moving averages, so look for this in the software somewhere. Try the Help? If this fails, look on the Equis web site FAQ page, or other forums where if nobody has previously asked, you could post a question.