The setup overview for EMA Rainbow Strategy is a daily collection of analyzes of potential trades based on this strategy. Detailed description of the strategy can be found in this link. The cycle will last exactly two weeks. After this period, on Saturday, October 7, I will publish a summary of the statistics of this strategy and will report whether or not during these two weeks tested strategy was profitable.
As announced earlier, on the same day, I will also present another strategy that I will test for another two weeks. In this way I will try to test as many investment strategies as possible to find the best and most effective.
On AUDJPY today emerged 3 signals to open the options. All of them proved to be successful and thanks to a 74% return rate offered by broker uTrader, it was possible to earn 2.22:1 on this instrument. If within the next two candles the price returns below the purple moving average (EMA 14), we would consider reopening PUT option.
On EURCAD the EMA Rainbow strategy has already generated 6 signals. Five of them proved to be successful, while the last one, although the option has not yet expired, is likely to be lost. According to the EMA Rainbow strategy, the option expiration period is three times the observed interval. If this is the case, then with a return rate of 76%, you could still earn 2.8: 1 on this instrument. The red arrows on the graph mark the signal candle, while the colored rectangles show time range from opening to expiry of the option.
On Eurodollar we could open three PUT options today. Thanks to the high efficiency of the signals at 100% and the possible return rate of 78%, it was possible to earn 2.43:1 on this instrument. If within the next two candles the course returns below the purple moving average (EMA 14), we would consider reopening PUT option.
Very similar situation is on GBPUSD, where also the EMA Rainbow strategy generated three signals to open PUT option and as for the EURUSD, they proved to be profitable. In case of this pair, uTrader offers 76% return on investment, which means that until now (until 1pm), you could earn 2.28:1.
There were five signals today on GOLD. In this case quantity did not go hand in hand with quality. Although only one (fourth) option turned out to be lossy, it is worth noting that the effectiveness of the first position is marginal and, possibly, its final outcome (profit or loss) would largely depend on the execution of our order (in this case some seconds could play a key role. ). However, if we accept that the orders would be executed perfectly at the closing price of the M15 candle, we could have 4 profitable options and one loss. Broker uTrader offers in this case a 76% return on investment, which means that we could earn 2.04:1.
Similar is the situation on NZDUSD where the EMA Rainbow strategy also generated 5 signals, only one of which turned out to be lossy. With a return rate of 74%, we could have so far earned on this instrument 1.96:1.
USDCAD pair gave us today 6 signals to open the CALL option. The first one turned out to be wrong, while the next five generated a profit. This means that at a rate of return of 76% offered by uTrader, we would have been able to earn 2.8:1 on this instrument.
Taking into account the results of all the presented instruments, it turns out that by investing only in these 6 pairs of currencies, thanks to the EMA Rainbow strategy today (until 13:00) achieve a return on investment of 16.53:1.
I am aware that the above analyses depict historical set ups, but the whole cycle is supposed to:
- show how and what signals on the chart you need to look for,
- check if the EMA Rainbow strategy is profitable
- make us familiar with the strategy assumptions
As I mentioned in the introduction, on Saturday, October 7, I will publish a report summarizing the statistics of this strategy and will show whether or not these two weeks where profitable. So far, the results seem to be very optimistic.
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