Moving Average Rainbow Indicator MT4 Free Download | Forex Indicators Download - MetaTrader 4 Resources - MetaTrader 4 Resources
The Rainbow Moving Average indicator (MA Rainbow) is a set of eight moving averages that indicate upward and downward price trends as well as trend reversals.
The position of price relative to this set of moving averages (MAs) can highlight potential buy and sell trading opportunities.
Rainbow Moving Average Indicator Specification Sheet
The specifications of the MA Rainbow indicator are shown in the table below.
| Indicator categories: | Trading Aids MT4 Indicators Bands and Channels MT4 Indicators |
| Platforms: | MetaTrader 4 Indicators |
| Trading Skills: | Intermediate |
| Indicator Types: | MT4 Overbought and Oversold Indicator Reversal MT4 Indicator |
| Time frame: | Multi Time Frame MT4 Indicators |
| Trading Style: | Day Trading MT4 Indicators Scalper MT4 Indicators Swing Trading MT4 Indicators |
| Trading Tools: | Stock Market MT4 Indicators Cryptocurrency MT4 Indicators Forex MT4 Indicators |
Rainbow MA indicators at a glance
In addition to identifying bullish and bearish trends, the Rainbow Moving Average indicator also plays an important role in detecting trends. Overbought and oversold zones.
Given this characteristic, one can predict trend reversals in these areas and consider entering counter-trend trades.
Buy Trade Setup
According to the Ethereum (ETH) chart, the price reached the last moving average (green line) on the 30-minute time frame, indicating top levels or oversold territory.
Price reversals and upward moving average crossovers can be viewed as buying entry opportunities.
Sell Trade Setup
According to the USD/CAD 1 hour chart, the price reached overbought territory before reversing and falling below the moving averages.
In this case, the main scenario is bearish and every touch of the moving average can be considered a selling trading opportunity.
Rainbow MA indicator settings
The Rainbow Moving Average indicator is set up as follows:
- LENGTH: Number of candles used to calculate the moving average
- PRICE_SOURCE: Defines which part of the candle is used for calculations
- MA_METHOD: Selection of moving average type
Conclusion
The Rainbow Moving Average indicator is designed to show directional trend changes in the MetaTrader 4 platform. In addition to showing the trend direction, it also highlights overbought and oversold areas, which can serve as good entry points for trading.
Under normal market conditions, price crossings above or below the moving average are used as signals to enter trades in the direction of the trend.
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