Originally Posted by: gorachand

Hello, In Metastock version 11 Professional edition in the templates section there is a template called 'Rainbow Chart'.It is nothing but a plotting and crossover of multiple moving averages.The periods of the moving averages are well selected and when the entire band turns over itself reflecting multiple crossovers of the moving averages it heralds a new powerful trend. It is unbeliavably accurate with no whipsaws-- some sort of 'Holy Grail' of technical indicators the answer to a technical analysts eternal quest. I read somewhere that of all the trading indicators and methods developed including neural networks, genetic algorithms,stochastic and ito calculus from probability theory, moving averages still remain the most reliable.This must be an example. What I would like to ask in the forum is an entry exploration formula for this indicator displayed in the template.Since the moving average periods and methods are not given or displayed-- I cannot fashion the exploration formula by myself. Is there anybody who can help me? Regards, Dr.Chatterjee

Hi,

Basically, each average is just a 2-period simple moving average of the prior moving average. What might be a bit confusing is that the price is also displayed as a Line chart. The components of the template are listed below:

• Closing price as a line

• 2 period simple moving average of the close (red)

• 2 period simple moving average of the red moving average (dark yellow)

• 2 period simple moving average of the dark yellow moving average (yellow)

• 2 period simple moving average of the yellow moving average (bright green)

• 2 period simple moving average of the bright green moving average (green)

• 2 period simple moving average of the green moving average (blue green)

• 2 period simple moving average of the blue green moving average (light blue)

• 2 period simple moving average of the light blue moving average (blue)

• 2 period simple moving average of the blue moving average (dark blue)

• 2 period simple moving average of the dark blue moving average (purple)

Originally Posted by: gorachand

Hello MS Support, Just read your reply.Thank you very much for replying. In this context I would like to name the Rainbow Oscillator and the Rainbow minimum and maximum bands. I would like to know how they are interpreted in relation to the Rainbow multiple moving average. Waiting to hear from you Regards, Dr.Chatterjee

Hi,

Rainbow Max and Rainbow Min I believe are just "Helper" formulas for the Rainbow Band Upper and Rainbow Band Lower. Basically, Rainbow Oscillator, Rainbow Band Upper, and Rainbow Band Lower can all 3 be plotted in the same inner window.

Change the Rainbow Oscillator to Histogram Style (add a Horizontal line at 0 if you like), and color the upper and lower bands as desired. Interpretation is pretty lengthy, but the article was from July 1997 - http://technical.traders.com/archive/volume-2014.asp?yr=1997#Jul

Edited by user Tuesday, March 13, 2018 5:05:10 PM(UTC)  | Reason: Not specified