The strategy depends on 3 EMA. These are six, fourteen and twenty six exponential averages. Being a dissimilar color, it is called as 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 strategies for implementing and following there today. The downside might be accuracy factor if not utilized as per the rules. This is properly explained by Lotzof Botz in a video, which in turn clears most of the confusion.
EMA, which stands for Exponential Moving Average
The EMA, also known as weighted average reacts to cost movement in a much fast manner than normal moving average. In the world of trading, the twelve and twenty six day exponential moving averages are mostly used for the sort term or temporary undertaking. An EMA is a vital part of the technical analysis and 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 time the three lines are all made of various colors with twenty six period of moving average which is being thicker compared to other two, you are all set to move. The twenty six period moving averages are noted as static line of the Rainbow EMA, displaying us the way of trend. If the twenty six EMA’s is at bottom of a market is trending upside and when it is at top portion, the market starts to move down.
Before we make an entry, all of us need three lines to line up, looking for pullback to mid line. No matter, in which way a market is trending, fourteen periods shifting average will be center line. You should note that we don’t want to trade if lines are closed together. Now, we can place high or call and low/put choices when cost pulls back to their center line. 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.
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 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 :
EMA7 indicator
EMA8 indicator
EMA6 indicator
Word document with strategy instruction.