The Rainbow Averages trend trading strategy
The Rainbow Averages trend trading strategy is based on the fan principle moving averages with signal filtering by other indicators. It is recommended to use the Rainbow Averages strategy only when there is a trend in the currency pair, because it will give a lot of false signals in flat conditions.
Input parameters
- Currency pairs: any
- Timeframe: M30 and older
- Bidding time: London, New York.
- Risk management: after calculating the stop-loss, choose this lot sizeto risk no more than 2-5% of the deposit per transaction
Used indicators
- Averages rainbow (26, 2, 10, 9)
- Step one (25, 2.5, 0.5, 50)
- Buzzer (period 20)
Setting up the price chart
- Unpack the archive
- Copy the template into the templates folder
- Copy the indicators to the folder MQL4 -> indicators
- Restarting the terminal
- Open the chart of the desired currency pair
- Install a template named Rainbow Averages Strategy
The schedule should look like this:
Signals indicating the opening of a long position (buying)
- the price is above the fan of the moving averages;
- an up arrow appeared;
- The moving average fan is colored in green;
- blue Buzzer indicator (optional).
Signals indicating the opening of a short position (sale)
- the price is below the fan of the moving averages;
- a down arrow appeared;
- The fan of the moving averages is colored pink;
- Buzzer indicator red (optional).
Setting Stop Loss and Take Profit Orders
- stop loss is set above/below the previous maximum/minimum;
- Take Profit order is set according to the trend, depending on the timeframe and currency pair. It is also allowed to close a position when the arrow appears in the opposite direction.
The Rainbow Averages trend trading strategy - is an example of classic trend-following trading. The introduction of additional filters in the strategy has significantly increased the accuracy of its signals for entry.
Before using the Rainbow Averages trading strategy on a real deposit, we recommend that you test it on a demo account.
Download Rainbow Averages Trading Strategy Template and Indicators
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