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Rainbow EMA MT4 Forex Day Trading Strategy

May 06, 2020
Rainbow EMA MT4 Forex Day Trading Strategy

You can now download Rainbow EMA MT4 Forex Day Trading Strategy for free on AtoZ Markets indicators gallery.

Rainbow EMA Forex Day Trading Strategy is a moving-average based indicator with several lines. These lines tend to fan out during a trending market environment creating an area that could be visibly identified. Because pullbacks are minor reversions to the average price, the area inside the Rainbow MA becomes a prime area for price to pullback to. Right after the pullback, if a trend has enough strength to continue the trend, it will resume its initial direction. This makes the Rainbow MA a great tool to identify entry areas during trending market conditions.

Indicators:

  • RainbowMMA_09 (Sky Blue)
  • RainbowMMA_10 (Gold)
  • 50 EMA (Magenta)

Timeframe: 5-minute chart

Broker of the month

Currency Pair: any major pair

Trading Session: London or New York session

How to use Rainbow EMA Forex Day Trading Strategy

Buy (Long) Trade Setup Rules

Entry

  • The Rainbow MAs should be above the 50 EMA
  • Price should come from above the Rainbow MAs
  • The Rainbow MAs should be fanning out
  • Wait for price to retrace and close inside the Rainbow MAs
  • Enter a buy market order as price closes back above the Rainbow MAs

Stop Loss

  • Set the stop loss at the fractal below the entry candle

Exit

  • Close the trade on profit as price enters back and closes inside the Rainbow MAs

Sell (Short) Trade Setup Rules

Entry

  • The Rainbow MAs should be below the 50 EMA
  • Price should come from below the Rainbow MAs
  • The Rainbow MAs should be fanning out
  • Wait for price to retrace and close inside the Rainbow MAs
  • Enter a sell market order as price closes back below the Rainbow MAs

Stop Loss

  • Set the stop loss at the fractal above the entry candle

Exit

  • Close the trade on profit as price enters back and closes inside the Rainbow MAs

How to download and install an indicator

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on the “Download Indicator” button located at the bottom of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into the MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select the “Rainbow EMA Forex Day Trading Strategy” template to apply it on the chart.

Note: This indicator was developed by Mark. AtoZ Markets does not carry any copyrights over this trading tool.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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