The Rainbow Oscillator: What is it and How Does it Work?
The Rainbow Oscillator is a trend-following indicator derived from the Rainbow Charts. This indicator combines the Signal Line, the MACD, Ashi and RSI values which are then interpreted into a consensus of the Rainbow Charts trends. This analysis is used in the Forex market to identify price moves early on in order to capture rapid market movements and make profitable trades.
The Rainbow Oscillator is generally set to a 30 minute timeframe and is based on a moving average line period of 11 days and a MACD set with values of 2, 10, and 4. This indicates when price reversals may occur. This is useful for Forex traders who are looking to take advantage of potentially profitable gains.
Using the Rainbow Oscillator for Scalping
The Rainbow Oscillator Scalping strategy can be used effectively for short term trading with relatively small position sizes, due to the short term decision making involved. Scalping is the practice of taking profits quickly and often in the financial markets to produce high volumes of short term gains from small but frequent price moves.
The Rainbow Oscillator Scalping follows trends very closely and benefits from minimal drawdown when capturing price reversals. The signals aim to capture quick movements in the market when the MACD values reach the peak. This signals the start of a price movement and traders then follow the trend until it reverses and sells the position. This is a quick and easy way to make money from the Forex markets.
How To Implement The Rainbow Oscillator Scalping Strategy
In order to effectively use the Rainbow Oscillator Scalping strategy, it is important to understand the technical tools involved. The key elements are to set the chart pattern to a filled candle, set the timeframe to 30 minutes and to set up the moving average line period to 11 days as well as the MACD to 2, 10, and 4.
Once these settings are set, traders can then begin to analyse the MACD values and watch for price reversals when the MACD values reach their peak. When this happens the trader should open a position and follow the trend until it reverses and then close the position. By making use of this strategy, traders can take rapid profits from the Forex market without taking on too much risk.
The Rainbow Oscillator scalping strategy is a useful and effective tool for Forex traders who are looking to make a quick return on their investments. By understanding the technical tools involved and following the trends until a reversal is signalled, traders can take profits quickly and easily. It also requires minimal drawdown and can provide a steady return on short term investments.
What is The Rainbow Oscillator Arrows Indicator?
The Rainbow Oscillator Arrows Indicator is a technical trend-following trading system derived from the Rainbow Charts. This indicator uses the Rainbow moving averages to create a histogram with bands at its edge. The system then uses the Random Walk Index to look for buy/sell signals. The Rainbow Oscillator Arrows Indicator is used for Binary Options Trading, primarily as a High/Low strategy. This indicator is suitable for Forex trading on major pairs, Futures, and Indices.
How Does The Rainbow Oscillator Arrows Indicators Work?
The Rainbow Oscillator Arrows Indicator utilizes the Rainbow Charts for generating trend-following signals. The Rainbow Charts are built of seven moving averages, each possessing a certain weight and a particular time frame. The Rainbow Oscillator Arrows Indicator monitors these seven moving averages in order to find the maximum difference between them to define when buy/sell signals occur. When the spread of the moving averages on the chart changes significantly, the Rainbow Oscillator Arrows Indicator will switch from Buy to Sell signals or vice versa.
The Rainbow Oscillator Arrows Indicator works as a channel, with lines on each side of the histogram. A buy signal is indicated when the price is in a zone below/above the lower/upper band; alternatively, a sell signal is indicated when the price is in a zone within the channel.
Overview of Rainbow Oscillator Arrows Indicator Advantages
The Rainbow Oscillator Arrows Indicator provides a number of advantages. Foremost, it is a very effective trading system as it monitors the consensus of the Rainbow Charts to give reliable signals. Furthermore, its usage of the Random Walk Index makes gleaning optimal trading decisions easier for beginners. Additionally, its Rising/Falling Arrow alert gives a quick overview of the changes in trend making it easier for traders to take immediate action. Finally, its use of seven different moving averages makes this indicator extremely accurate and reliable.
Overall, Rainbow Oscillator Arrows Indicator provides an effective and easy to use system that is readily suitable for use by both beginners and experienced traders alike. With its accurate buy/sell signals and its user-friendly interface, this indicator is sure to suit a variety of different trading strategies.
