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 AUDCAD only since the beginning of the session we had already 4 signals to open positions. As it turns out, 3 out of these positions could be profitable. The red arrows on the graph show signal candles, while the coloured rectangles mark interesting for us candles drawn from opening until the option expire time. According to the assumptions of the EMA Rainbow strategy this period is three times longer than the observed interval. Another signal may appear after next correction and retest of violet average moving average (EMA14).
On EURCAD we had similar situation. In this case we also had 4 signals and just like on AUDCAD, only the second would be lost. If we re-test the moving average EMA14 in the nearest future, we might consider opening PUT option with expiration of the option = 45 min.
100% efficiency can be observed today on the EURUSD, where the EMA Rainbow strategy today generated two potential signals for opening PUT option. The red arrows on the graph show signal candles, while the coloured rectangles mark interesting for us candles, drawn from opening until the option expire time.
NZDJPY gave us as many as 7 signals to open the position today. It is also worth noting very high efficiency. At the time of writing this article, all of the 6 completed options were profitable and the seventh option was in a profitable position while writing this article (although we were still waiting for the closing of the last 5 minute candle).
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 and unlike the “End of the Day” strategy that has been tested previously, it may prove profitable.
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