Rainbow Forex Trading Strategy

The rainbow forex strategy is a remarkable versatile trading system that combines three indicators for its signal triggers i.e. the HMA_v2, Forex Analyzer Pro and the RainbowMMA_09 custom indicator.

Chart Setup

MetaTrader4 Indicators: HMA_v2.ex4 (color modified), Forex Analyzer Pro (default setting), RainbowMMA_09.ex4 (default setting)

Preferred Time Frame(s): 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: Any

Currency Pairs: any

Download

Download Rainbow Forex Trading Strategy

Buy Example (click the image for full size):

rainbow-forex-strategy

Fig. 1.0

Strategy

Long Entry Rules:

Enter a long position when the following conditions or rules are in place:

  1. If the Forex Analyzer Pro custom indicator forms a green upward pointing arrow that is aligned below prices bars, it means that there’s an upward price pressure and a buy should be initiated.
  2. The RainbowMMA_09 custom indicator intersects the blue dots of the HMA_v2 custom indicator, a signal that price is about to push higher.

Always consider this signal at points where the Forex Analyzer Pro’s arrow forms just beneath the intersection point of the RainbowMMA_09 and HMA_v2 custom indicator.

Stop Loss for Long Entry: Place stop ≥ 25 pips from entry price.

Exit Strategy/Take Profit for Long Entry

The following conditions should inform your exit or take profit move:

  1. If the Forex Analyzer Pro forms a red downward pointing arrow that is aligned above prices bars, it denotes that bullish momentum is diminishing and an exit and/or take profit should be initiated.
  2. If the tomato colored dots of the HMA_v2 custom indicator gets in contact with the RainbowMMA_09 custom indicator lines, this indicator pattern is indicative that a reversal is underway and as such an exit and/or take profit is strongly recommended.

Sell Entry Rules

The following chart/indicator patterns will define a sell entry base on the following conditions:

  1. When the Forex Analyzer Pro red downward pointing arrow forms above price bars, it shows that downward pressures are being introduced into the market and bears are having their way.
  2. Watch the tomato colored dots of the HMA_2 cross the lines of the RainbowMMA_09 custom indicator – this is a sell signal.

Stop Loss for Sell Entry: Place stop loss ≥ 25 pips from entry price

Exit Strategy/Take Profit for Sell Entry

The following conditions will define an exit or take profit strategy for a sell entry:

  1. If the green upward pointing arrow of the Forex Analyzer Pro forms below price bars, we should be ready to exit and/or take profit from such position(s).
  2. The dotted lines of the HMA_v2 turns blue and gets in contact with the lines of the RainbowMMA_09 custom indicator.

rainbow-forex-strategy1

Fig. 1.1

Free Download

Download The Rainbow Forex Trading Strategy

About The Trading Indicators

The HMA_v2 custom indicator is a dotted line indicator that changes the color of its dots to trigger buy or sell signals.

The RainbowMMA_09 is the 9th GMMA forex indicator is a series of eleven technical studies that is purely based on the Guppy multi moving average.

The Forex Analyzer Pro is a versatile forex signal indicator that deliver accurate alerts via its arrow and also draws support and resistance levels on the activity chart.

 

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