The Rainbow Trend MT4 forex indicator consists of a mix of the relative strength index (RSI) indicator and QQE.
The indicator is not only very good looking (beautiful rainbow) but also delivers good results.
It’s a trend-following trading indicator.
For an up trending market, the red colored lines must be aligned below the yellow lines AND the green lines must be aligned above the yellow lines.
For an down trending market, the red colored lines must be aligned above the yellow lines AND the green lines must be aligned below the yellow lines.
This indicator is useful and efficient for scalping (M1, M5 charts), day trading (M5, M15 charts), swing trading (M30, H1 charts) and position trading (H4, D1 charts) for any currency pair.
The indicator is extremely beginner friendly and self explanatory.
The EUR/USD H1 chart below displays the Rainbow Trend forex indicator in action.
Basic Trading Signals
Signals from the Rainbow Trend indicator are easy to interpret and goes as follows:
Buy Trade: Open buy when the the red colored lines are aligned below the yellow lines AND the green lines are aligned above the yellow lines.
Sell Trade: Open sell when the red colored lines are aligned above the yellow lines AND the green lines are aligned below the yellow lines.
Close the open trade at an opposite signal or use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (History, TimeFrame, BBSmooth, QQESmooth, Mode) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Trend Following
Copy and paste the adaptive-relative-strength-index-smoothed.mq4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)