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 AUDCHF today showed up 8 signals to open the CALL option. Unfortunately, their effectiveness was only 50%, which means that we would lose 4 times. Taking into account the achievable 76% return rate, we can see that we could lose 0.96: 1 today. The red arrows on the graph mark signal candles, while the colored rectangles are showing time from the opening until the option expires. According to the EMA Rainbow strategy, the expiry period of the option is three times the interval observed.
Even more so, as many as 10 signals have appeared on the EURAUD pair today. Unfortunately, in this case, the efficiency was only 50%, which means that if the broker’s rate of return was 76%, we would lose 1.2:1.
Situation on EURCAD looks better. On this currency pair, the EMA Rainbow strategy has generated 6 signals so far, of which only two have been lost. This means that with a return rate of 76%, the instrument could earn 1.04:1.
The situation is similar on EURCHF. In this case also appeared 6 signals to open CALL option and 4 of them turned profitable. In this case, the rate of return on investment is, however, slightly lower (68%), which means that it would be as low as 0.72: 1.
Definitely the best instrument today was the NZDJPY. In this case, the EMA Rainbow strategy generated 5 signals, 4 of which turned out to be profitable. With a return rate of 71%, you could earn 1.84:1 on this instrument.
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 of last 7 days in total seem to be optimistic.
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