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  1. #1
    Administrator Martin Kay's Avatar

    Hot The Exponential Moving Average Rainbow Strategy !!!

    Hi guys,

    A Great New Strategy Recommended for Newbie Traders is presented on the BOTS School Section. Check the Exponential Moving Average Rainbow Strategy for Binary Options Trading and find out how to make it one of your main weapons in your binary trading!

    Originaly presented by Eno Eteng.

    The Exponential Moving Average Rainbow strategy is a binary options trading strategy that uses the 6, 14 and 26-period exponential moving averages (EMA) to determine points at which the trade can purchase a call option (buy) or a put option (sell). The concept of this system is to use the signal provided by the EMA cross on the currency chart, and apply the signal to the same currency in the binary options market. This is a trend following strategy. In terms of this strategy, an uptrend is identified when 6 EMA is above 14 EMA and both are above the 26 EMA. Once this condition is met, the trader must wait for price to retrace down towards the 14 EMA (so the one in the middle) and touch it.

  2. #2
    Legendry Member Michael Hodges's Avatar
    Moving average, and moving average strategies, are really good ones, and easy for newbies to pick up on, anybody using anything like this?

  3. #3
    Active Member random's Avatar
    I'd be surprised if buying (or selling) simply because the price has touched a MA would work. There may be something in it if it's coupled with an understanding of PA. But then, if you have a decent understanding of PA, you'd be giving up a lot of value to get to the touch point. It can provide decent entry points if there's market follow-through, but then you're relying on that to happen.

    Linuxtroll has a thread on FF with rainbow trading (i.e. let's throw as many MAs as we can at a chart in lots of different colours), but now he just flogs his system as a trend-following scalping strategy/software with corny motivational commentary.

  4. #4
    Legendry Member milos's Avatar
    MA is one of my favorite trading indicators. I can confirm as reliable trading tools.

  5. #5
    Master Member SeasaltMcFish's Avatar
    I use EMA's for my short term strategy and love them.

    Added Fibonacci for confirmations.

  6. #6
    Veteran Member Ronnel's Avatar
    Rainbow Strategy is one of my favorite before but I use a different strategy now (Candlestick Analysis) but I find the Rainbow Strategy to be very solid, reliable and easy to use as long as the trader knows how to use it properly, plus it's very newbie friendly.

    If I may add.. here are two pictures that can help our fellow newbie traders if they plan to use the Rainbow strategy.

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    Click image for larger version. 

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    Hope these pictures help, happy trading!!!

  7. #7
    Legendry Member willyw's Avatar
    Thanks for sharing, ronnel

  8. #8
    Veteran Member Ronnel's Avatar
    The Rainbow Magic...

    Hi guys! I just want to share this. I just finished a trade now which landed ITM but it was close... I'm using Candlestick Analysis, Fractal and Bollinger Band with manual S/R and trendline plotting (this is my well kept holy grail, no joke... lol!). Most of you may think that I mainly use Naked Charts or Ichimoku but this is it. When I'm trading I use different strategies to support my main strategy. I use Ichimoku to easily see the trend and to easily do prediction on probable future direction of the candles. I use Rainbow strategy to see if the candles are inside the Rainbow or the Rainbow lines are flat. This gives me a good warning that I'm trading in the "danger zone" just like the photos below. Notice that the time I entered the trade the candles are inside the rainbow, though it landed ITM, I nearly lost the trade. Yes trading is doable inside the rainbow (which I just did) but it will be a lot safer especially for newbies if they wait until the candles are above or below the rainbow lines. I usually watch 3 to 8 currency pairs all on M5 so the alarm regularly goes off like crazy so this is why I use Ichimoku and Rainbow as my support charts to quickly do my analysis and to quickly and safely enter trades so that I can move to another currency pair. I think that the Rainbow Strategy is really very good as long as the trader knows how to use it because it will keep you away from trading in the danger zones

    Click image for larger version. 

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    Notice the power of the Rainbow. It shows that I'm trading inside what I call the "danger zone". Also notice my entry candle, it's a bullish harami candle which means that the trend is going up but the previous candles are showing signs of divergence (longer upward wicks). This means that the candles may go up a bit then dive down again. I was hoping to get 2 to 3 bullish candles before it dives down again but it dove down on the next... Notice that my entry candle peeped up the center band line so I thought that it will give me 2 or 3 bullish candles before it turns south and I was wrong but I still landed ITM The candle is also half way on my imaginary downward trendline so that is why plus 2 to 3 upward candles... Ichimoku is showing early signs that the candles will dive down again but not as straightforward as the Rainbow. Also notice my indies, MACD is losing momentum, Heikin Ashi bars (two red and green line above the indies) are showing green but this too is not that reliable when inside the rainbow.

    This is how I analyze the candles but even with all my candlestick analysis, S/R and trendlines and lots of hocus-pocus, Rainbow is easily showing me a big "WARNING SIGN" and I just took the live trade (trade is still on-going when I wrote this) to prove that my theory is right because I hate sharing what I know by showing old trades from hindsight because I think that cherry picking for a lesson is less effective and is less beneficial for my study. Focusing on the right side of the chart is where the action is especially when trading inside the danger zone. Me love the adrenaline rush, lol!!!

    Click image for larger version. 

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    Notice the power of Ichimoku. It shows that I'm trading against the trend...

    To sum it up, Rainbow Strategy doesn't suck
    Last edited by Ronnel; 09-18-2015 at 05:24 AM.

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