292# Rainbow Strategy MT5
Maximo Trader 2025
The Rainbow Indicator consists of multiple moving averages (typically simple or exponential) layered by color groups, for example:
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Fast MAs (yellow/orange) – sensitive to short-term price action
Medium MAs (green/blue) – represent intermediate trend
Slow MAs (purple/magenta) – represent long-term trend direction
The rainbow structure visually shows momentum compression/expansion and trend direction.
BUY RULES
1. Trend Confirmation
A buy setup is valid only when all of the following are true:
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The slowest MA group (purple) is sloping upward.
The medium group (green/blue) is above the slow group.
The fast group (yellow/orange) is above the medium group.
The rainbow is expanding upward (the layers spread out, not compressed).
2. Entry Trigger
Enter Buy when:
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Price pulls back into the fast or medium MA layers without breaking below the medium group.
Price forms a bullish reversal candle (for example: bullish engulfing, pin bar, or strong bullish candle).
The fast MAs turn upward again, re-aligning in correct rainbow order (fast > medium > slow).
Optional stronger signal:
A breakout of the previous minor high while the rainbow is aligned upward.
3. Stop Loss
Place SL based on one of the following:
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Below the medium MA group (green/blue), or
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Below the most recent swing low.
4. Take Profit
Choose one of the following methods:
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Fixed RR: TP = 2x risk (e.g., SL 20 pips → TP 40 pips)
Trail Stop: Move SL below the medium MA group as the rainbow expands upward.
Exit Condition: Close the trade when the fast MAs cross down through the medium MAs.
SELL RULES
1. Trend Confirmation
A sell setup is valid only when:
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The slowest MA group (purple) is sloping downward.
The medium group (green/blue) is below the slow group.
The fast group (yellow/orange) is below the medium group.
The rainbow is expanding downward.
2. Entry Trigger
Enter Sell when:
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Price pulls back into the fast or medium MA layers without breaking above the medium group.
A bearish reversal candle appears (bearish engulfing, pin bar, strong bearish candle).
The fast MAs turn downward again, realigning in correct order (fast < medium < slow).
Optional stronger signal:
A breakout below a previous minor low during bearish rainbow alignment.
3. Stop Loss
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Above the medium MA group, or
Above the most recent swing high.
4. Take Profit
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Fixed RR: TP = 2x or 3x risk
Trail Stop: Move SL above the medium MAs as the rainbow expands downward.
Exit Condition: Close when fast MAs cross upward through the medium group.
Additional Notes
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Avoid trading when the rainbow layers are flat, compressed, or twisted: this indicates a ranging market.
Higher timeframes (M15–H1) generally produce more reliable rainbow trends.
Combine with volume, support/resistance, or price action for stronger confirmation.
Best conditions occur after a strong expansion of the rainbow following a squeeze.
292# LawGirl's 4H strategy Trading System
Submit by Maurizio B. 02/02/2012
All Currency Pairs
Time Frame:
4 Hr Chart
Indicators:
1) RSI (Period: 3)
2) Trend Lines
3) LawGirl's
Rules
Use the RSI with period 3 to know the trend. If the RSI is upwards for all the three timeframes then draw a trend line connecting lows of the candlesticks. After it touches at least 3 times the trend line the next time when it touches the trend line again enter a long trade.
Similarly if the RSI is downwards for all the three timeframes then draw a trend line connecting highs of the candlesticks. After it touches at least times the trend line the next time when it touches the trend line again enter a short trade.
Take Profits (TP) and Stop Losses (SL)
You can place set TP and SL if you are more comfortable with that. It is best to use support and resistance levels for both. Remember that H4 and larger TFs must have more breathing room, so do not place stops too tightly.
In the pictures LawGirl's 4H strategy forex system in action.
4H Forex Strategies
