The Rainbow Oscillator Metatrader 5 forex indicator is based on the Mel Widner’s Rainbow Average, which shares a lot of similarity to the Guppy MMA.
The indicator is primarily intended to gauge the market trend and it offers only two possible states:
- Upward state.
- Downward state.
The indicator is simply comprised of a dodger blue upper band (that falls above the zero signal line) and a sandy brown lower band (placed below the zero signal level), with both wrapped around the dodger blue and sandy brown histograms.
The histograms either pop up above or below the zero signal level as a means of gauging trends.
Signals from this indicator works great for any trade style including scalping, day trading and swing trading.
The USD/CHF H4 chart below displays the Rainbow Oscillator Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the dodger blue histograms of the Rainbow Oscillator Metatrader 5 forex indicator gets aligned above the zero signal level.
Sell Signal: Go short when the sandy brown histograms of the Rainbow Oscillator Metatrader 5 forex indicator pops up below the zero signal level.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the sandy brown histogram of the Rainbow Oscillator indicator gets on display.
Exit sell trade: Close all sell orders if while a bearish trend is running, the dodger blue histogram of the Rainbow Oscillator indicator pops up.
Tips: Long term trading is well supported on the Rainbow Oscillator indicator, at the same time, short term traders like scalpers can also deploy the indicator when trading off the smaller timeframes (M1, M5).
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable [Period, RWMA depth (maximal 50) Price], Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the Ranbow oscillator.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)