The Rainbow Averages trend trading strategy is a classic example of trading in the direction of the current trend. The rules of the strategy are simple, and the input signals are highly accurate.
The Rainbow Averages trend trading strategy is based on the principle of a moving average fan with filtering signals by another indicator. Trading on the Forex strategy of Rainbow Averages is recommended only if there is a trend in the currency pair, since in the flat it will give a lot of false signals.
Input parameters
- Currency pairs: any
- Timeframe: M30 and older
- Bidding Time: London, New York.
- Risk management: after calculating the stop loss, choose such a lot volume so that the risk is no more than 2-5% of the deposit per transaction
Indicators Used
- Averages rainbow (26, 2, 10, 9)
- Step one (25, 2.5, 0.5, 50)
- Buzzer (period 20)
Price Chart Setup
- Unpack the archive
- Copy the template to the templates folder
- Copy indicators to the MQL4 folder -> indicators
- Restart the terminal
- Open the chart of the desired currency pair
- Install the template named Rainbow Averages Strategy
The graph should look like this:
Signals indicating the opening of a long position (purchase)
- the price is above the moving average fan;
- an up arrow appeared;
- a moving average fan is colored green;
- Buzzer indicator in blue (optional).
Signals indicating the opening of a short position (sale)
- the price is below the moving average fan;
- a down arrow appeared;
- the moving averages fan is pink;
- Buzzer indicator in red (optional).
The Rainbow Averages trend trading strategy is an example of classic trend trading. Introduction to the strategy of additional filters significantly increased the accuracy of its input signals.