Rainbow Forex Reversal Trading Strategy

The Rainbow forex reversal trading strategy tracks down bullish and bearish price reversals on the activity chart.

If you’re in search of a forex trading strategy that rolls in the profits, yet simple enough for just about anyone, then look no further, as the Rainbow strategy is suitable enough for such a role.

Chart Setup

MetaTrader4 Indicators: sinTrend.ex4 (default setting), RainbowMMA_06.ex4 (default setting), RainbowMMA_09 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

Download

Download the Rainbow Forex Reversal Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy order if the following indicator or chart pattern gets displayed:

  1. If the lime lines of the RainbowMMA_06 custom indicator crosses the gold and deep sky blue lines of the RainbowMMA_09 custom indicator bottom up with price trading somewhat above, price is said to be making a bullish reversal i.e. a trigger to go long on the designated pair.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator stays above the 0.00 signal level as illustrated in Fig. 1.0, price is said to be pressured to the upside i.e. a buy signal.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions take precedence:

  1. If price closes below the lime lines of the RainbowMMA_06 custom indicator during a bullish trend, it is an indication of weaning bulls power in the market, as such an exit or take profit is advised.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator break below the 0.00 signal level as seen on Fig. 1.0, price is said to be making a U-turn from its earlier bullish stance, an exit or take profit is recommended in this light.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the lime lines of the RainbowMMA_06 custom indicator crosses the gold and deep sky blue lines of the RainbowMMA_09 custom indicator top downward with price trading somewhat below, price is said to be making a bearish reversal i.e. a trigger to go short on the currency pair of focus.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator hover below the 0.00 signal level as shown on Fig. 1.1, price is said to be pushed lower i.e. a sell signal.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following indicator or chart pattern are on display:

  1. If price closes above the lime lines of the RainbowMMA_06 custom indicator during a bearish trend, it is an indication of weaning bears power in the market, as such an exit or take profit is advised.
  2. If the yellow histograms of the sinTrend.ex4 custom indicator breaks above the 0.00 signal level during a sell trigger, an exit or take profit is advised.

Sell Trade Example

Free Download

Download the Rainbow Forex Reversal Trading Strategy

About The Trading Indicators

The sinTrend.ex4 indicator was created by Nikolay Kositsin, in 2005. The sinTrend.ex4 indicator can be used on intraday time frames as well as for long term trading.

The yellow histograms within the indicator’s window either aligns below or above the 0.00 signal level.

The RainbowMMA_06 and RainbowMMA_09 custom indicators are the sixth and ninth GMMA forex indicator in a series of eleven indicators that are put together on the Guppy Multi Moving Average.

Download Forex Analyzer PRO For Free Today!

Brand New Forex System With Super Accurate And Fast Signals Generating Technology.

Forex Analyzer PRO generates buy and sell signals right on your chart with laser accuracy and NEVER REPAINTS!

  • Up To 200 Pips Every Day
  • Buy And Sell Forex Signals
  • Advanced Daily Range Detection
  • Email & Mobile Trading Alerts
  • No Repainting Or Lagging