ASMFI Rainbow MTF Indicator is a full-fledged trend-following forex trading indicator. It uses a rainbow crossover system for identifying market trends. This indicator uses 15 Adaptive Smoothed Money Flow Index (ASMFI) bands with MTF and plots crossover signals which indicates the potential changes in trends.
ASMFI Rainbow MTF Indicator can be applied to all kinds of forex currency pair charts including stocks and CFDs. Moreover, you can use this indicator for both scalping and intraday trading purposes.
Install the indicator in your MT4 terminal. Once you’re done, your trading chart will appear like the following image:
Also Read: How to Build Forex Trading Strategy?
ASMFI Rainbow MTF Indicator: Interpretation
Among the 15 rainbow bands, 7 are known as the fast-ASMFI (bluish) and the other 8 bands as the slow-ASMFI. Fast-ASMFI moves above the slow-ASMFI mean the bullish crossover signals and its time to go for the long entries. Oppositely, slow-ASMFI above the fast-ASMFI represents the bearish crossover signals and implies to look for the short entry opportunities. You counter an opposite crossover signal after entering a trade can be taken as a trade-exit signal. Its slow ASMFI bands represent the dynamic support/resistance levels of the market and can be used to determine the stop loss level of your entries as well.
ASMFI Rainbow: Buy Parameters
- Price bar forms as bullish candle above the ASMFI Rainbow
- This indicator plots the bullish crossover signal
- Buy triggers after the above conditions are met
- Set stop loss below the slow-ASMFI level
- Exit long/take profit when the rainbow plots a bearish crossover signal
ASMFI Rainbow: Sell Parameters
- Price bar forms as bearish candle below the ASMFI Rainbow
- This indicator plots the bearish crossover signal
- Sell triggers after the above conditions are met
- Set stop loss above the slow-ASMFI level
- Exit short/take profit when the rainbow plots a bullish crossover signal