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 AUDUSD today appeared 3 signals to open positions. The first two turned out to be successful, but the last one was bad. Considering that we are currently observing crossing of moving averages, we would expect the EMA14 to be re-tested in near future, where the signal to open the PUT option on this instrument could appear. The red arrows on the graph mark the signal candle, while the colored rectangles show time from opening until the option expires. According to the EMA Rainbow strategy, the expiry period of the option is three times the interval observed.
EURCAD – today we were able to open 5 options untl now. In this case only three were profitable, which means that the potential profit would be small.
On EURNZD situation is similar, where there were also 5 signals, and like on EURCAD, two of them would be lost. If in the course of creating current candle on the M15 chart the price will return above the purple moving average, we could have another signal to open CALL option on this instrument.
Definitely, more accurate signals emerged today on the EURGBP currency pair. Although the EMA Rainbow strategy would allow only for three options to be opened but all would end up with profit.
Two, almost model examples occurred today on the NZDUSD. In case of the first and second PUT options price beat EMA14 and next two candles came back below negating the breakout. These are ideal signals that are highly effective, however, observing a 15 minute chart, we notice that they are extremely rare. Two more signals were based on bearish pinbars. In these cases the market breaks the purple moving average and returns below during one candle. Anyway, from 4 signals only one turned out to be false.
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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