The strategy depends on 3 EMA. These are six, fourteen, and twenty-six exponential averages. Being a dissimilar color, it is called Rainbow EMA. A new strategy of trading to the binary trading options, this is not so popular among dealers. In my opinion, it is possibly the simplest strategy for implementing and following there today. The downside might be the accuracy factor if not utilized as per the rules. Lotzof Botz properly explains this in a video, which in turn clears most of the confusion.
EMA, which stands for Exponential Moving Average
The EMA, also known as a weighted average, reacts to cost movement faster than the normal moving average. The twelve and twenty-six-day exponential moving averages are mostly used for the short term or temporary undertaking in trading. An EMA is a vital part of the technical analysis and is known as an indicator.
Process of Applying the Rainbow Exponential Moving Average
The initial step is to add EMA’s to preferred chart software. Since the three lines are all made of various colors with twenty-six period of moving average, which is thicker than the other two, you are all set to move. The twenty-six-period moving averages are noted as a static line of the Rainbow EMA, displaying the trend. If the twenty-six EMA’s is at the bottom of a market is trending up, side, and when it is at the top portion, the market starts to move down.
Before we make an entry, we need three lines to line up, looking for a midline pullback. No matter how a market is trending, fourteen periods shifting average will be a centerline. You should note that we don’t want to trade if lines are closed together. We can now place high or call, and low/put choices when cost pulls back to their centerline. One should never deal against the entire trend direction while utilizing Rainbow EMA.
Strategy 1 :
Download Rainbow EMA EA – download Rainbow EMA Expert Advisor free.
Strategy 2: Strategy Rainbow EMA Madness
Rainbow Madness EA, you can download and read all instructions for free.
The basic idea is :
Long – BUY order this strategy will create if:
Rainbow 07 is above rainbow 06, and rainbow 08 is above rainbow 07
10 ema and 12 ema cross
Short – SELL order this strategy will be made if :
Rainbow 08 is below rainbow 07, and rainbow 07 is below rainbow 06
10 ema and 12 ema cross
All instructions you can read at Forexfactory forum and you need to download :
Word document with strategy instruction.