Rainbow indicator
One of the most beautiful indicators designed for trend analysis, based on a variety of popular scripts that, thanks to a comprehensive approach to trend analysis, provide a fairly accurate price movement forecast.
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 wealth 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 color scheme on the indicator changes depending on the trend present in the Forex market.
During an uptrend, the red line of the rainbow is at the top, and the bottom line turns blue. When the trend changes, the picture begins to change and the blue line appears at the top.
After you study the history of the rainbow indicator's behavior, it will become clear how to use it in practice.
True, for the script to work properly, you'll have to dig a little into its settings and change the color scheme, but the result is worth it.
Rainbow indicator settings
The main parameters analyzed by the tool are price direction, the strength of the current trend, and the likelihood of a reversal. The analysis is 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 existing settings, but it is still advisable to change the color scheme.
The signal to open positions is the reversal of the rainbow, as well as the expansion or narrowing of its width.
The rainbow indicator was rated a solid four points during testing and is recommended for use as a source of signals for opening positions.
