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Rainbow Indicator MT4 Free Download
The Rainbow Forex Indicator is an mt4 technical indicator with seven moving averages (ghosts) to create a rainbow of forex support or resistance. This rainbow acts as a support or resistance area on the chart.
Moving averages determine the direction of the trend and find dynamic support or resistance levels. Price respects the moving averages.
How does the mt4 rainbow indicator work?
Moving Averages (MAs) are used to find key levels on the mt4 chart. But sometimes they need help coming up with the correct chart inversions. This is why there is a combination of seven moving averages in the rainbow forex indicators, all of which are used to view important reversal levels on the chart.
These seven moving averages (MAs) form a large area. This extended area acts as a support or resistance level of the chart.
Price bounces off a forex rainbow of moving averages (MAs). After the rainbow is broken, a price trend reversal in the chart will occur, and Price trends change.
- If the price breaks through the forex rainbow of moving averages with a large bullish chart candle that crosses all the moving averages, the chart price trend will change from bearish to bullish.
- Conversely, if the price breaks the forex rainbow with a large bearish histogram candle that crosses all the moving averages, the price trend will change from bullish to bearish.
See Also : MTF High Low Forex Indicator for MT4 Free Download
Types of Moving Averages used by the Rainbow Forex Indicator
The Rainbow indicator uses 7 moving averages with different periods.
You can also change the period according to your requirements.
However, it is recommended to use the low-to-high moving average for the following periods:
- 9 MA
- 16 MA
- 21 MA
- 35 MA
- 41 MA
- 55 MA
- 61 MA
These are the recommended moving averages to create a rainbow of moving averages. You can specify different colors depending on the strength of each moving average.
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Signals of Rainbow Moving Average MT4 Indicator
Buy signal
When a large bullish candle crosses the seven moving averages and closes above the MAs, it is giving a buy signal.
It helps if you continue to buy until the price breaks the 61-period moving average in the opposite direction.
Sell signal
When a significant bearish candle crosses the seven moving averages and closes below, it indicates a sell signal.
Hold a short position until a break of the 61-period moving average does not occur in the opposite direction.
Conclusion
Rainbow indicator mt5 or in mt4 is the best and simplest indicator for beginner traders. It can also generate profits in the forex market if traded with other confluences, such as chart patterns or trading indicators.
Use candlestick patterns to get accurate signals and high wins with a rainbow indicator.
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