What is the use of Watson envelope indicator?

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Sarah Quinn
Answered 5 months ago
<p id="isPasted">The Nadaraya-Watson Envelope Indicator is a dynamic volatility indicator that adapts to changing market conditions by smoothing price data using a kernel regression technique. It calculates upper and lower bounds based on the Average True Range (ATR) and specified factors to provide boundaries for extreme price movements.</p><p>This indicator is designed to help traders identify potential reversal zones and confirm the direction of the trend by looking at the relationship between the price and the envelopes.</p>