rainbow indicator
One of the most beautiful indicators designed for trend analysis, based on many popular scripts, which, thanks to an integrated approach to trend analysis, give a fairly accurate forecast of price movements.
In addition to its interesting appearance, it should be noted that this tool is also one of the most effective trend indicators.
The developers position the rainbow indicator as a professional tool for technical analysis of trend movements; it is highly functional and has a lot of additional settings.
This is a rather complex program for the Metatrader 4 trading platform and other versions of terminals based on it.
If you look closely, you can see how the range of colors on the indicator changes depending on what trend is present in the Forex market.
During an uptrend, the red line of the rainbow is on top, and the bottom one becomes blue; when the trend changes, the picture begins to change and the blue line is already on top.
After you study the history of the behavior of the rainbow indicator, it will become clear how to use it in practice.
True, for the script to work fully, you will have to delve a little into its settings and change the color scheme, but the result is worth it.
Rainbow indicator settings
The main data parameters that the tool analyzes are the direction of price movement, the strength of the existing trend, the probability of a reversal. The indicators are analyzed based on the following settings.
• FastEMA – fast exponential moving average.
• SlowEMA – slow exponential moving average.
• SignalSMA – simple exponential moving average.
• Thresh – turns on the sound signal when turning.
If you wish, you can use the already installed settings, but it is still advisable to change the color scheme.
A signal to open positions is the reversal of the rainbow, as well as the expansion or narrowing of its width.
During testing, the rainbow indicator was rated a solid four points and recommended for use as a source of signals for opening positions.